Location Selection Case StudyWe can list the main factors that play a role in determining the location selection as follows: $$ Transportation costs$$ Raw material and energy resources$$ Skilled or unskilled labor problem$$ Wage level$$ Labor flows$$ Consumption markets$$ Economic situation of the country$$ Climate conditions$$ Cultural conditions$$ Environmental behavior$$ Duties and fees at the place of establishment$$ Availability of financing resourcesIn this case study, some of these issues are examined in an application about Tofa Automotive Plant$\mathrm{.}1.$ Land and Construction CostsTofa automotive plant is $10$ km from Bursa. It was established on an area of $750$ acres on the Istanbul highway.In selecting the establishment location, the transportation status of the land was examined. Bursa$-$Istanbul highway passes right next to the land. Therefore, there is no need to build new transportation facilities. The company operates under the Italian FIAT license in the automotive industry. The materials imported from Italy arrives at customs directly by land or sea. Materials are transported from customs to the plant by road.The location was chosen outside the city. Because the land is large enough to meet the future expansion needs of the industry. Today, Tofa operates in four separate areas: thermal power plant, press group, auxiliary services and main factory building. Also there is additional space for the establishment of the sub$-$industry and the planned social areas and residences for the employees employed in the factory.Another important issue is the topographic condition of the land. Since the land is very suitable for construction, it did not cause much expense in the construction of business buildings. The construction and installation of the machines were completed in $22$ months. The groundwater level and ground characteristics of the region are suitable for industrial establishment.Figure $1.$ Tofas Automotive Factory location$\mathrm{.}2/42.$ MaterialsBecause of Tofa's raw materials are not based on natural resources, they are not the dominant factor in choosing the location of establishment.The materials used in production are supplied from three sources.$-$ Imported materials: Imported materials constitute $30\%$ of the product. These are directly come to customs by road and from there to the factory. These are; engine, engine parts, vanillator belt, vanillator pulley, transmission, rods, steering wheel, steering box, indicators, accelerator pedals and brakes. $-$ Material supplied from sub$-$industry: Automotive sub$-$industry is the whole of the manufacturing branches that produce a part used in production in main assembly companies. The automotive supply industry started in Bursa in recent years and is developing rapidly. The quality of the parts ordered from the sub$-$industry is high, and their costs and prices are low. Hoses, rubber wedges, springs, rims, electrical parts, glass, batteries and steel sheet bodies are supplied in Bursa sub$-$industry.$-$ Materials produced by the factory itself: The factory's activities include manufacturing, assembly and trading of engine parts and spare parts for passenger cars and other motor vehicles.Providing raw materials and resources as mentioned above, Tofa automotive factory is an organization focused on sub$-$industry in addition to the materials it imports. Bursa is the center of the regions where the sub$-$industry is located. Since it is connected to the surrounding cities by regular highways, materials supplied from various regions come to the factory easily and cheaply. Bursa, as a region that has had an automotive sub$-$industry for many years, can easily meet the needs of the factory$\mathrm{.}3.$ Labor ForceEstablishment of factories, supply of materials, operations and production of the product at the desired quality and even price; It is only possible with skilled personnel.In areas that require trained workers, such as the automotive industry, the establishment of businesses shifts to regions where there are many trained workers. Since the Bursa region has been closely interested in the automotive industry for years, the Tofa automotive factory did not have any difficulty in obtaining the trained workers it needed. All of the workers required for Tofa were provided from the Bursa region. The reasons why workers prefer Tofa are; a more regular work life such as overtime, annual leave, and opportunities to advance in their profession$\mathrm{.}4.$ Energy SourcesTofa purchases the electrical energy it uses in industry and lighting from high voltage industrial electricity. The factory has its own generator. Transporting electric traction to the factory was not costly$.$ Because the electricity distribution network passes very close to the factory area. The electrical energy needed by the factory was supplied from the distribution network at a low cost$\mathrm{.}5.$ TransportationTofa procures the materials from imports and sub$-$industry. The imported material arrives at customs by road or sea. There have been significant increases in transportation costs in recent years. To compensate for this increase, transportation costs are saved by using large tonnage transportation vehicles. Thus, unit load cost decreases. Bursa's highway infrastructure is suitable for the use of large tonnage vehicles and trucks.Bursa is the center of the automotive sub$-$industry in T$$rkiye$.$ Bursa is connected to these regions with a regular road network. The fact that the factory is very close to Gemlik port, that gives an opportunity to use of sea routes$\mathrm{.}3/4$In addition, one of the reasons why the Tofa automotive factory was established in Bursa is its proximity to consumer markets and easy access to these markets. Tofa ships automobiles to consumer markets by road. Cars are sent to the markets with trailers that can accommodate $6$ cars.Figure $2.$ Tofass manufacturing and importing figures in $2021$ and $2022.$ Source: Company annual report $20226.$ Market PlaceTofa automotive industry produces products to sell in the national market $($all over the country$).$ At the same time, exports are also made abroad. Its customers are end consumers and industrial buyers. Industrial buyers make fleet purchases.Tofa's domestic sales reached $199$ thousand $900$ units in $2023.$ The company exported more than $60$ thousand vehicles. The Fiat brand maintained its domestic market leadership with a $15\mathrm{.}7\%$ market share in $2023.$ The Egea model has maintained its market leadership for eight years. Despite the end of Doblo's production, the light commercial vehicle market share maintained its level last year with $25\mathrm{.}7\%.$ While the export volume decreased with the expiration of the contract for the Doblo model, increased sales to the Middle East and North Africa region supported the volumes. The company also entered the electric and hybrid vehicle market$\mathrm{.}4/4$Figure $3.$ a$)$ Tofass exporting destinations in $2022.$ b$)$ Tofass total production and sales volumes in $2022$ and $2023($estimate$).$ Source: Company annual report $2022.$ Question: According to the case study, make location planning for a new automotive factory in Turkey. Please explain your reasons for choosing the region you specified. You can use the Tofas case as a success story and decide to be close or far from its location. Do not forget to give reasoning.