Turkey’s Automotive Industry: On the Threshold of the Shift from Volume to Value (2025–2030)

Turkey’s automotive industry has managed to preserve its production volume as of 2025, supported by strong domestic demand and a well-integrated export structure with Europe. However, it remains a highly sensitive balance sector, exposed to exchange rates, interest rates, tax regulations, and carbon policies. With approximately USD 37 billion in exports and USD 32 billion in imports, the automotive industry continues to play a strategic role in Turkey’s production base and foreign trade.

Yet the future of the sector is no longer defined solely by how many vehicles are sold, but by which technologies are used, how much value is created, and how low the carbon footprint of production is.

Global automotive power balances are changing rapidly. The winners of the 2020s are no longer just vehicle manufacturers, but those who control batteries, software, and supply chains. As a result, China-based manufacturers are rising quickly, while traditional automotive giants such as Germany and Japan are under intense transformation pressure.

China has become the global leader in electric vehicle production, having built an almost fully domestic ecosystem covering batteries, software, and components.
Germany continues to benefit from its premium engineering and strong brand equity, yet it is racing against time in electrification and software-defined vehicles.
Japan follows a slower but stable transition path, supported by its leadership in hybrid technologies.
South Korea stands out as one of the countries that has achieved the most balanced transformation, driven by the Hyundai–Kia group.

This global picture clearly demonstrates that success in the automotive industry is no longer just a matter of engineering excellence, but increasingly one of industrial policy, scale, and speed.

On the production side, Turkey holds a strong competitive advantage particularly in commercial vehicles and the automotive supplier industry. Its multi-brand manufacturing structure, flexible production capabilities, and qualified supplier ecosystem are key strengths. In addition, the aging vehicle fleet supports medium-term demand continuity in the domestic market.

However, the sector’s structural vulnerabilities are equally clear:

• High dependence on imports and foreign currency
• Low value-added production structure
• A tax system that disrupts demand and planning
• The risk of lagging behind in the electric vehicle ecosystem (battery, software, power electronics)
• High interest rates limiting both consumer demand and investment

For these reasons, domestic market strength should not be seen as a permanent safeguard, but rather as a temporary buffer.

In Europe, the combined share of electric and hybrid vehicles is approaching 60%, while fully electric vehicles account for around 18%. This indicates that fully electric, hybrid, and internal combustion vehicles will coexist for a prolonged period.

For Turkey, the critical point is this:
Electrification is not solely a passenger car issue. The electrification of commercial vehicles including urban distribution, fleet management, and municipal vehicle represents a natural opportunity area. However, infrastructure availability, financing conditions, and grid capacity will be decisive factors shaping the pace of this transition.

Compared to Europe, the automotive sector plays a far more vital role in Turkey. The main reason is the country’s heavy reliance on road-based transportation.

Road transport provides speed and flexibility, enabling door-to-door delivery from production to final destination. Yet this structure also makes the economy more vulnerable to fuel prices, vehicle costs, and carbon regulations.

In Europe, rail and maritime transport have been systematically strengthened through deliberate policies, positioning road transport as a complementary mode. In Turkey, rapid and largely unplanned growth has placed almost the entire transportation burden on trucks.

The future of Turkey’s automotive sector will be shaped by:

• The speed of transition to low-carbon production
• Investments in electrification and software
• Deepening of the supplier industry and value-added growth
• The ability to adapt to Europe’s green transformation
• Structural steps to rebalance the automotive sector’s central role within the transportation system

Companies that successfully manage this transformation will benefit from growth, consolidation, and lasting competitive advantages. Those that fail to adapt will inevitably face contraction and loss of market share.

Turkey’s automotive industry now stands at a crossroads. Its role as a cost-driven assembly hub must give way to a model built on technology, software, low-carbon production, and integrated supply chains.

Success will no longer come from producing more vehicles, but from building a smarter, cleaner, and higher value-added automotive ecosystem.