Investments in auto industry continues despite challenges: OSD head

ISTANBUL

Companies operating in the automotive industry have continued their investments despite the challenges they face, says Cengiz Eroldu, president of the Automotive Manufacturers’ Association (OSD), who also expects Chinese carmaker Chery to announce an investment in Türkiye.

Investments in the local automotive industry over the past 10 years amounted to $10 billion, he noted.

Carmakers have undertaken those investments in an unfavorable environment where competition has become more challenging and the share of domestically produced vehicles in the market has declined, Eroldu furthered.

He noted that carmakers Ford Otosan, Renault and Tofaş have started the manufacturing of new models.

Eroldu recalled that the Chinese company announced a $1 billion investment in Türkiye in July 2024.

In September last year, Ford Otosan launched the production of a new generation light commercial vehicle model at its Gölcük plant, he said adding that Renault in November started the production of the Duster model vehicle in which it invested around 400 million euros.

Also, in November Renault launched the production of its KO model vehicle with an investment of 200 million euros, according to Eroldu.

This year, Hyundai announced that it would start producing an electric vehicle at its Türkiye plant, he noted.

“We are now also expecting Chery to finalize and formalize its investment decision. This will an investment of around $1.5-2 billion,” Eroldu said.

He pointed out that the share of domestic vehicles among all cars sold in Türkiye dropped to 31 percent in 2024 from 46 percent in 2020, negatively affecting local manufacturers.

The industry posted a foreign trade deficit of $6.6 billion in passenger cars in 2023 and thanks to steps taken the deficit shrank to around $4.8 billion last year, according to Eroldu.

“Back in 2019, we had a trade surplus of $8.9 billion. The share of domestically produced vehicles in the U.S. is 61 percent,” he added.

Recent data clearly showed the problems in the domestic market.

In the first two months of 2025, the auto market shrank more than 14 percent from a year ago to 159,384, with passenger car sales falling 9.8 percent to around 132,000 units while light commercial vehicle sales down more than 30 percent to 27,419.

The auto industry has set the target of reaching the production capacity of 2.5 million vehicles by 2028 and they are nearing this target, Eroldu said.

“We ranked fourth in European production and have now moved to fifth place. Our aim is to climb to the third spot,” he added.

The automotive industry’s exports were $37 billion in 2024 and they aim to boost this figure to $50 billion, Eroldu said.