Problems in Europe spell troubles for Turkish carmakers

ISTANBUL

Troubles in the European auto market are posing risks to Turkish carmakers, according to Cengiz Eroldu, the president of the Automotive Manufacturers’ Association.

Eroldu noted that Europe is the largest export market for the Turkish auto industry.

“We consider the possibility of shifting the unsold of vehicles to the Turkish market due to the potential market contraction in Europe as a serious risk,” Eroldu said.

The latest data showed that some 83 percent of the exports of the Turkish automotive industry went to European countries in the first 10 months of 2024.

In January-October, automotive exports to European countries amounted to $25.3 billion.

“The contraction in European markets and idle production capacity may cause a decline in the Turkish automotive industry's exports and negatively affect our production,” Eroldu warned.

The demand for vehicles in Europe has not increased sufficiently due to rising inflation, according to Eroldu.

“The increased competitiveness of China, the lower-than-expected demand for EVs in Europe, the need for investment in high technology, declining profitability, and increasing fragility in the supply chain are challenging all European manufacturers,” he explained.

Eroldu particularly pointed to the contraction in the German automotive sector, saying that this has profound effects on the global car market. “This is significantly shaping the expectations for 2025,” he added.

Germany was the largest market for the Turkish automotive sector, with shipments to this country totaling $4 billion, followed by the United Kingdom with $3.5 billion and France with $3.4 billion.

“To mitigate the impact of these fluctuations in export markets, we need to increase the share of domestic vehicles in the domestic market,” Eroldu said.

“It is important to develop policies to strengthen Türkiye’s eroding manufacturing competitiveness protecting our existing facilities has become even more vital,” he added.

The Turkish auto industry’s production declined by 10.4 percent year-on-year in October to 122,000 units, data from OSD showed earlier this month.

Passenger car production fell 7 percent last month from a year ago to 85,115 units.

In the first 10 months of 2024, 1.12 million vehicles were produced in Türkiye, marking a 7.3 percent year-on-year decline, with passenger car output falling 4.8 percent to 742,303 units.

The share of imported passenger cars in the market was 70.3 percent in this period.

Passenger car sales inched up 0.2 percent annually in January-October to 742,303 units.