Türkiye is an Important Part of the Global Value Chain

Since 2003, original equipment manufacturers (OEM) have invested over USD 18 billion in their operations in Türkiye. These investments significantly expanded their manufacturing capabilities, which in turn led Türkiye to become an important part of the global value chain of international OEMs.

KAAN MASATÇI

Presidency of the Republic of Türkiye, Investment Office

Project Manager

Türkiye has proven itself as a resilient player in global value chains with multinational companies shoring up their presence in the country in line with their strategies of nearshoring, regionalization, and diversification. Given its strategic location that unites three continents, Türkiye is positioning itself as a crucial hub for companies seeking alternatives for strengthening their global production and export network.

Over the years, Türkiye has positioned itself as one of the key players in the mobility industry, and now there are 13 different OEMs operating within the country, 8 of which are global actors such as Mercedes, Toyota, Hyundai, Renault, Isuzu, Ford, MAN and Stellantis. On July 8th, 2024, one of the leaders of the global EV market, BYD, signed an agreement for their $1 billion investment in Türkiye, further strengthening the country's global position in the industry.

In 2023, Türkiye produced over 1.4 million automotive units, ranking 3rd in Europe and 1st in Central and Eastern Europe. Automotive exports reached $35 billion, making it the largest sector in Turkish exports. Most of these exports were to European countries, positioning Türkiye as a strategic manufacturing and export hub. Türkiye does not only offer a large domestic market of 85 million people but also serves as a gateway to the EU and 30 other countries through the EU customs union and free trade agreements, making it a competitive player in the mobility industry as well as other sectors.

Growing market size and increasing production volumes naturally formed a significant automotive supplier network within the country. Currently, there are over 500 tier-1 suppliers operating in Türkiye, and more than 30 of them are among the global top 100 automotive suppliers, which underlines the significant supply chain advantages the Turkish automotive industry offers to the OEMs.

Apart from its manufacturing capabilities, having the third-largest researcher pool in Europe, Türkiye has a strong R&D ecosystem as well. Currently, there are over 720 international companies operating R&D offices within Türkiye. For example, today, Ford Otosan employs more than 2,000 R&D personnel across its offices in the country. Additionally, this capability of Türkiye is one of the reasons why BYD has chosen Türkiye. Opening an R&D center is a significant aspect of BYD’s announced investment.

Türkiye's EV market grew nearly tenfold in 2023, with EV and hybrid vehicles making up 18% of the local passenger vehicle market. This rising trend in electrified mobility has driven the need for charging points, which increased more than fivefold last year, reaching 13,160. The number of charging points is expected to exceed 1.3 million by 2030 in the average scenario expected by the Energy Market Regulatory Authority (EMRA).

The transformation of businesses focusing on sustainability, digitalization, electrification, and decarbonization is crucial. The Turkish automotive industry is progressing through successful policies, incentive programs, and a commitment to the European Green Deal. In June 2022, the Ministry of Industry and Technology published the Mobility Vehicles and Technologies Roadmap, setting eight targets for EVs, including supporting EV production and becoming a regional battery production center. Incentives in the automotive and mobility industry can cover up to 70% or more of the total investment, especially for projects contributing to the electrification of mobility.

Sources: OICA, Ministry of Industry and Technology, EMRA, TAYSAD, Ford Otosan official website