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Automotive Industry

Automotive Industry

The foundation for the Turkish automotive industry was laid in the early 1960s. In a period of rapid industrialization and progress, this key sector transformed from assembly-based partnerships into a full-fledged industry with its own R & D and massive production capacity. Between 2000 and 2017, original equipment manufacturers invested $ 14 billion in their operations in Turkey. These investments have significantly expanded their production capacity and resulted in Turkey becoming a major player in the global value chain of international OEMs. The Turkish automotive industry is highly efficient and competitive thanks to its value-added production and meets and exceeds international quality and safety standards.

• Thanks to their competitive and highly skilled workforce, combined with a dynamic domestic market and favorable geographic location, vehicle production in Turkey's 13 global original equipment manufacturers increased from 374,000 in 2002 to more than 1.7 million units in 2017. This equates to one average annual growth rate of around 10 percent over the same period.

• The strong growth of the Turkish automotive sector put Turkey in 14th place in the world in 2017, ranking it the 14th largest automaker in the world and the fifth largest in Europe.

• Turkey has become an important location, above all for the production of commercial vehicles. By the end of 2016, Turkey was the number one manufacturer of light commercial vehicles in Europe.

• The Turkish automotive industry is a proven high-quality manufacturing location and is now seeking to improve its R & D, design and branding capabilities. At the end of 2017, the Turkish automotive industry had 132 R & D and design centers among its car manufacturers and suppliers.

• Prominent examples of global product development, design and construction brands in Turkey include Ford, Fiat, Daimler, AVL and Segula. The Ford Otosan R & D center is one of Ford's three largest global R & D centers, and the Fiat R & D center in Bursa is the only center of the Italian company serving the European market outside its home country. At the same time, Daimler's research and development center in Istanbul complements the truck and bus production facilities of the German company in Turkey. AVL Turkey, which has since opened its second R & D center in Turkey, has started to develop autonomous and hybrid vehicle technologies.

• Turkey offers a favorable environment for building supply chains. There are around 1,100 suppliers supporting the production of OEMs. Because the parts are delivered directly to vehicle manufacturers' production lines, the localization rate of OEMs varies between 50 and 70 percent.

• Turkey is home to many worldwide suppliers. More than 250 global suppliers have chosen Turkey as their production site, of which 28 are among the world's 50 largest suppliers.

• Automobile manufacturers are increasingly choosing Turkey as a production location for their export sales. This is evidenced by the fact that around 80 percent of production in Turkey in 2017 was destined for foreign markets. In the same year, more than 1.3 million vehicles were exported from Turkey to foreign markets. In addition, with more than 986,000 exported vehicles in 2017, Turkey was the largest vehicle exporter in the European market.

• While Germany, France, Italy, the United Kingdom and Spain are currently the major export customers of the Turkish automotive industry, there is a trend towards diversification of export destinations. In doing so, companies are trying to gain a foothold in the markets of nearby emerging markets, where there is considerably more demand potential for new cars.

• The increase in per-capita income from $ 3,000 at the beginning of the 2000s to around $ 11,000 in 2017 led to higher sales in the automotive market. At the same time, the average annual sales in the market increased from 360,000 at the beginning of the 2000s to around 1,000,000 in 2017.

• Despite this strong sales growth, market penetration for automobiles in Turkey, at 165 cars per 1,000 inhabitants, is well below the European average of 500. This represents great opportunities for automakers in the domestic market. The increased purchasing power and the low approval rate will increase sales in the coming years.

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