The star of Turkey's export mix and burgeoning industrial base, the automotive sector is flourishing and showing no signs of slowing down in the race to supply the Turkish and European markets.

Turkey is currently the biggest bus manufacturer and third largest light commercial vehicle manufacturer in Europe according to the Export Promotion Center of Turkey (IGEME). Following a drop in production and sales in 2009, the sector is picking up again, has exceeded pre-crisis sales, and is well on the way to a full recovery in production. According to a report by the Turkish Industrial Development Bank (TSKB), figures for 2010 show 1,094,557 units of production (excluding tractors), domestic sales of 793,172, and an export total of 754,469 units.

Turkish manufacturer Tofaş, a joint venture between Fiat Auto and Koç Holding, led the way in production with 312,245 units made in 2010, whereas Oyak-Renault remained in pole position in terms of exports, with 233,057 units in the same year.


Automotive production was up from 869,605 units in 2009 to 1,094,557 in 2010, representing a 26% annual growth rate. The capacity utilization rate was also up 15 percentage points to 72%. A total 111,792 units were produced in December 2010, the highest monthly production since July 2008 according to TSKB.

Joint venture is the name of the game as many foreign companies locate their production centers in the country. Following top producer Tofaş into second place in terms of production in 2010 was Oyak-Renault, followed by Ford Otosan, manufacturing mainly pick ups, and then Toyota.

There are also several fully Turkish owned firms in the sector, including Karsan, which mainly produces and sells Peugeot light commercial vehicles (LCVs), Temsa, a part of the Sabancı Group, which produces self-branded buses and coaches, and Otokar, a subdivision of Koç Holding that produces buses and various military vehicles.

Passenger cars represent the greatest portion of total production, with 603,394 units produced in 2010. The second largest sub-category was pick ups, which reached 442,408 units of production in the same year, followed by trucks at 23,671 units, and minibuses at 16,978. Buses and midibuses made up the rest of the 1,094,557 total.


Domestic sales saw an increase of 38% year-on-year to hit 793,172 in 2010, and this is attributable to the positive effects of credit expansion. Passenger cars and LCV sales displayed a growth rate of 38% and 34%, respectively, while heavy commercial vehicles (HCVs) attained 27% growth. The impact of imported vehicles on overall domestic sales was also heavy, hitting 58.7% in 2010, up over four percentage points from 2009.

A strong lira has been one of the key drivers of consumer demand in the domestic market; however, the euro's appreciating course against the lira may be reflected in prices over 2011. This does not seem to have put the brakes on consumer demand yet, and auto loan rates continue to attract consumers.

In terms of domestic new car sales, Renault overtook Hyundai to reach top spot in 2010. Doğuş Automotive, which controls the Volkswagen franchise, and Ford Otosan took first and second place in terms of imported sales with 63,840 and 55,212 units respectively according to TSKB. Doğuş Automotive, a subsidiary of Doğuş Group, also distributes Porsche and Audi vehicles, and was the biggest market gainer of 2010 thanks to the launch of new models and competitive pricing in the LCV segment. The company now has an 11.2% share in the overall domestic market, behind Tofaş with 14.6% and Ford Otosan with 15.7%.


Turkish manufacturers are becoming world centers for global companies, through licensed production agreements. Such joint ventures contributed to the overall export level of 754,469 units in 2010—a year-on-year growth of 20%—at a value of $17.4 billion, representing 15.6% of the country's overall export portfolio.

Passenger cars make up the lion's share of exports, with 485,751 units sold abroad in 2010. The second highest selling category was trucks and pickups, with 251,986 units sold according to the Undersecretariat for Foreign Trade (DTM). The export value of passenger cars, trucks, and buses was $6 billion, $3 billion, and $852 million, respectively. The lower base in the LCV segment due to government incentives was the driver for the sector, with a year-on-year rise in LCV exports of 32%. The positive export environment benefitted mainly Oyak-Renault, Tofaş, and Ford Otosan, which exported 233,057, 193,737, and 175,754 units, respectively.

Turkey's main export partners in the automotive sector are France, Italy, Germany, and the UK, with export values reaching $1.9 billion, $1.6 billion, $1 billion, and $937 million, respectively. There exist 15 European countries in the top 20 list of Turkey's main automotive export markets. Russia is sixth on the list and the top rated non-European country with $469 million worth of vehicle exports in 2010. Russia is followed by Israel, Algeria, and the US in seventh, eighth, and ninth place, and Iraq is the only other non-European entrant on the list in 19th position, with total exports reaching $112 million.


The autoparts industry has risen in tandem with the automotive sector, and there are currently 4,000 companies in the industry, with 400 of them exporting. Of total exports, 70% are destined for the EU. The sector manufactures parts and pieces for vehicles produced both in Turkey and abroad, as well as for the original equipment manufacturer (OEM) sector and the aftermarket. The sales volume for the component sector hit $13.3 billion in 2009, and currently the industry produces almost all parts and components required by local auto producers, with an 80% localization rate, Orhan Özer, President and CEO of Toyota, told TBY in an interview.

The main export products are engine parts, tires and tubes, accessories for bodies, road wheels and parts, rubber parts for motor vehicles, and transmission shafts and cranks. The industry is centered around the Marmara and Aegean regions of Turkey, and the main export partners are Germany, Italy, the UK, France, Russia, Romania, Poland, Belgium, Iran, Spain, the US, the Netherlands, and Brazil.