Global automotive industry
The automotive industry is the 6th biggest industry in the world. the automobile industry in turkey
Automobile production on a global scale returned to the production of nearly 96 million motor vehicles in 2018, after reaching a record of 97.4 million units with 8 years of uninterrupted growth in 2017. In 2019, the European automotive market (28 EU and EFTA countries) shrank 0.3 percent. One of Europe’s top 5 automobile markets, Germany, experienced 4 percent growth. The UK market shrank by 3 percent, the French market by 0.2 percent, the Italian market by 0.6 percent, and the Spanish market by 6 percent. Meanwhile, the Russian market grew at a remarkable 14 percent, albeit with a base effect.
The automotive industry in Turkey
Turkey is a strong production and engineering hub for the global automotive industry value chain. With this strength, Turkey is the 15th largest automotive industry in the world with an average export rate. Turkey is a hub for global brands in terms of production, export, and engineering for international markets.
The Turkish automotive industry is based mainly in a couple of cities: Izmit, Bursa, Ankara, Izmir, and Aksaray. Thanks to the perfect location and easy transportation opportunities, global automotive giants benefit from Turkey and they make huge investments to expand their production in Turkey.
- Thanks to the strong and successful actors in the industry Turkey is in 5th place in Europe and 15th place in the world in terms of auto production numbers. (2018)
- Commercial vehicle sales numbers are outnumbered by passenger car sales nearly 3 to 1 which means the market is dominated by small-engine cars.
- With an average export rate of 85%, Turkey has become the largest export base of global OEMs outside of the EU. Furthermore, component exports have also increased by %13 over the past years in close relation with global developments. In 2019 the total export amount reached 31.2 billion $. Almost half of this amount comes from the export of Ford Otosan and Oyak Renault.
- In accordance with this situation, more than 250 international supplier companies are present in Turkey as Turkey is their production base. 28 of these companies are among the 50 largest global suppliers.
- Patent applications and R&D in Turkey are led by the automotive industry as well. In this sense, Turkey has great importance in automotive R&D and engineering. Turkish government supports companies who are willing to invest in automotive manufacturing and R&D with incentives in terms of tax and social security support, VAT & Custom duty, and interest support.
- The automotive industry in Turkey employs more than 500.000 people together with the supporting industries of the automotive industry.
International presence in Turkey
International giant automotive companies operate in Turkey. There are 9 R&D centers around Turkey and they not only support the local operations but also the international companies’ operations.
- Ford Otosan has an R&D center in Turkey which is the third-largest R&D center of Ford globally.
- Fiat’s R&D center in Bursa, Turkey is the only one outside of Italy serving the European market.
- Toyota is producing C-HR and Corolla Hybrid models in Turkey for world markets.
- Daimler’s R&D center has a globally important responsibility for the production of some parts of vehicles.
Turkey is producing its own electric car: TOGG
While talking about the automotive industry in Turkey it is a must to mention TOGG, the very first electric car of Turkey. The factory construction has started in the summer of 2020 and once the factory is completed the production process will begin in no time. According to the plan, the factory will be completed in the last quarter of 2021 and the first production and deliveries of the vehicles will be in the second half of 2022.
The total cost of the factory will be around 22 billion TL and 175.000 vehicles will be produced annually. The factory will employ more than 4000 people until 2032.
2021 projection for the automotive industry
As a result of the Covid-19 pandemic, the growth in the automotive industry has stopped and even some countries have already experienced narrowing in their local automotive market. Especially China’s automotive industry, which is one of the most important markets for the industry, has narrowed considerably.
However, Turkey’s automotive industry has been affected less than the other countries thanks to the strong industry, close relations, and easy transport to Europe. Following the pandemic, many other countries have been looking for opportunities for production in different countries to create alternatives to China in order not to stop their production chains.
