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Diebold Inc.'s decision to open a direct-sales office in Turkey is timed to coincide with Turkish banks replacing their existing ATMs in Western Europe's fastest-growing market for new ATM deployments.
But Diebold faces a tough challenge because NCR Corp. and Wincor Nixdorf AG, Diebold's two-largest competitors, control 93% of the country's ATM market.
Diebold's team of four direct-sales staff last Friday opened an office in Istanbul, Mike Jacobsen, a Diebold spokesperson, tells ATM&Debit News. Diebold's sales team replaces a third-party distributor that called on banks for Diebold, Jacobsen says. Istanbul is Turkey's largest city, with a population of 12.6 million.
The manufacturer is moving to court Turkey's banks because it expects the market for new ATM purchases to rapidly grow.
"The ATM market in Turkey is one of the fastest growing in the [Europe Middle East Africa region]," Danillo Rivalta, vice president and general manager for Diebold EMEA-Southern and Central Area, said in a statement. "We also know that many banks currently are replacing their old equipment, and we believe there are a number of compelling reasons for the banks to choose Diebold."
Jacobsen describes Turkey as a burgeoning market similar to some in Eastern Europe.
At the end of 2008, Turkey's banks had deployed 22,586 ATMs, a 20% increase from a year earlier, Dominic Hirsch, managing director of Retail Banking Research, a London-based strategic-marketing firm, tells ATM&Debit News.
An influx of foreign capital into Turkey's banking market has resulted in increased competition among the country's banks, leading to more bank-ATM deployments, Retail Banking Research reports.
Last year, Turkey added 3,768 new ATMs, making it the leading country for ATM deployments in Western Europe for the fourth consecutive year, Retail Banking Research says.
Turkish banks, however, were not the only ones deploying ATMs.
Talon, a nonbank ATM deployer and a new player in Turkey's ATM market, installed 600 ATMs last year.
Turkey is the sixth-largest ATM market behind the "big five" countries in Western Europe, which include France, Germany, Italy, Spain and the United Kingdom, Hirsch says.
Its next-closest competitor in ATM deployments is Belgium. Bank deployment of ATMs in Belgium increased 8% in 2008, Hirsch says.
Retail Banking Research includes Turkey among countries in Western Europe, although geographically Turkey is located in Southeastern Europe and Western Asia.
"We include Turkey in Western Europe, partly for historical reasons," Hirsch says. "It started to grow its ATM market in the early 1990s, at the same time as many of the countries in Western Europe. In contrast, the [Central and Eastern Europe] only really started growing strongly in the last five to 10 years."
North Canton, Ohio-based Diebold will find tough competition in Turkey, but company executives say they are confident.
NCR Corp., the world's largest ATM manufacturer based on annual shipments, and Wincor Nixdorf AG, the world's second-largest ATM maker, may claim the vast majority of the ATMs sold throughout Turkey, but Jacobsen sees an opening for Diebold.
"As banks increase their capacity, [Diebold] will be able to keep up with their growth," he says.
Diebold will manufacture ATMs destined for Turkey at the company's plant in Budapest, Hungary, Jacobsen says. Diebold also has signed a contract with an unnamed third party to service the company's machines in Turkey.
Diebold expects to sell a range of ATMs to banks there, including multifunctional ATMs and cash dispensers.
Diebold is attempting to convince Turkish banks to approve its Agilis EmPower software, which enables bank employees to change their ATMs' functionality, including language and bill denomination, in-house.
Turkey is one the most innovative and progressive countries in terms of bank innovation, Hirsch says, noting that Turkey's bankers are open-minded and that attribute may benefit Diebold. ATM
