Passenger and Commercial Vehicles Market

An Expert's View about Automobile in Turkey

Posted on: 31 Aug 2012


Turkey is a strategic market for automobile manufacturers in the region due to its growing domestic market, membership in the EU Customs Union, and being a gateway to Europe, Central Asia, and the Middle East markets. All these attracted foreign companies to invest in Turkey to easily access to the EU, benefiting from the cheaper labor costs and close location to Europe. Presently, there are 19 international vehicle producers in the Turkish market including; Ford, Toyota, Renault, Fiat, Chrysler, Opel, Honda, Hyundai, Peugeot, MAN, Mercedes, Isuzu, Mitsubishi, through joint venture (JV) partnerships with local firms, direct investment, or license agreements.

Although the automotive industry is regarded as one of the driving sectors of Turkey, 2011 trade figures show that almost 60% of the sales in the domestic market consist of imported goods. The local market for passenger cars and commercial vehicles amounted to almost $38 billion in 2011. A decrease is estimated in 2012 with a rough estimate of 10%. EU Customs Union members enjoy zero duties and advantageous shipping costs compared to U.S. products. However, American made vehicles, especially commercial ones, are well respected in the local market. Notwithstanding these challenges, Turkey's vehicle market offers opportunities for American firms. Additionally, the U.S. Exim Bank is open for business in Turkey and offers a variety of credits to facilitate exports to Turkey.


Turkey is one of the fastest growing emerging market economies in the world. This rapid growth is triggered by the following aspects of Turkey:

• a young population with rising consumption,

• real GDP growth over global average which is expected to continue in the coming years,

• growing industrial production and new industrial investments,

• decreasing inflation and interest rates which trigger investments,

• an increasing level of Foreign Direct Investment and

• active participation in international trade with strong exports and imports.

Turkey aims to increase its exports to USD 500 billion , its national income to USD 2 trillion and become one of the most developed economies in 2023. The automotive industry ranks first in Turkish exports, even exceeding traditional industries, like the textiles and apparel.

The total market in Turkey for passenger cars and commercial vehicles in 2011 reached 910,867 and 59% of these were imported, showing the high desire to buy imported vehicles in Turkey. Turkish consumers, especially the more affluent, are very brand and quality conscious and tend to purchase well-respected products. Most consumers prefer to use product lines with which they are familiar.. Brand familiarity plays an important role in product preference.

In October 2011, the Turkish Ministry of Finance raised the Special Consumption Tax for imports of commercial vehicles over 1.6 liters, no matter the size of their engine, However, there was no decrease in imports as was expected.

As seen, family passenger cars have the largest share. Segments B,C, and D are examples of this, however, higher-end passenger cars, like segments E and F also have remarkable market share.

The top supplying countries in ranking order in respected categories are as follows:

Passenger Cars: Germany, Spain, South Korea, France

Minibuses: Germany, Japan

Midibuses: Germany, Italy

Buses: Germany, Portugal, Italy, Switzerland

Pick-Up Trucks: Italy, France, Thailand, Germany, Spain

Trucks: Germany, The Netherlands, Belgium, Italy, France

The following are the brands in each category that are imported in ranking order:

Passenger Cars: Ford, VW, Opel, Toyota, Hyundai, Peugeot, Citroen, Audi, Fiat, Kia, Renault, Honda, and others. There are 47 different foreign brands imported into Turkey.

LCVs: VW, Renault, Citroen, Mercedes, Fiat, Mitsubishi, Dacia, Hyundai, Ford, Opel, Nissan, Toyota, Kia and others

Trucks: Mercedes had the largest share of the market in 2011. Others that follow in ranking order are: Ford, Iveco, MAN, Hyundai, Scania, Renault, and Volvo.

Buses: Again Mercedes ranked first in sales in 2011. Neoplan and MAN follow.

Turkish automotive production capacity reached 1.2 million units, and is targeting 1.5 million in 2015. 70% of the vehicles made in Turkey are exported and they represent 20% of all Turkish exports. Turkey has already overtaken the Czech Republic and Slovakia as the biggest car maker in Eastern Europe. Unlike the Czech Republic and Slovakia that are mainly gearing towards exports to European markets, with Germany being the main market, Turkey is increasing its exposure to markets beyond Europe, in the Middle East and North Africa.

Turkey ranks as the following among European Union countries:

- The second largest bus producer

- Largest LCV producer

- Third largest truck market

- Turkey is the 17th largest automotive producer on the world.

2011 has been another record year for the automotive industry in Turkey. Industry experts expect a decrease in growth in 2012 parallel to the rest Turkish industry, which has already occurred in the first half of 2012. However, the automotive sector is expected to be the least affected of all sectors In addition to the 19 local manufacturers of vehicles in Turkey that have already started improving their product lines and tuning their strategies to be more competitive in both the domestic and export markets, some other producers are about to start their operations in Turkey. Considering the stability in politics and economy in the last decade, Turkey is increasingly becoming a more reliably stable market in the world.

In addition, the recent stimulus package, its past 50 years in automotive industry and its expertise in subsidiary industry makes Turkey more attractive for foreign investors. Cherry Automobile Co. of China, being one of these, committed to build a factory in Turkey. Cherry will be building vehicles for the European market. Ford and Renault’s local partners are also expanding their operations. Both will be increasing their capacities to 500,000 units per year, and both will also include LCV segments into their existing production lines. German Daimler is another firm which started producing buses in Turkey with its Turkish partner.

Currently, more than 60% of the automobiles sold in Turkey are imported. As a result, the Turkish Government is trying to support the local manufacturers in various ways encouraging the automotive industry in the following areas:

• Target: 2023 - producing 4 million vehicles per year

• Increasing design and R&D facilities

• Working harder on electrical vehicles (already has started by decreasing Special Consumption Tax for electric vehicles, and working to establish charging stations.)

• Promoting new investments both for enlarging existing plants and for new lines and products

• Encouraging new lighter materials

• Developing Domestic brands

According to the Automotive Manufacturers Association (, 2011 was a record year for the Turkish automotive industry. But the total automotive market declined by 19%, in the first half of 2012, compared to the same period of the previous year. Passenger car market also decreased 16% during the same period. Parallel to the market, local production also decreased due to the market decrease both in Turkey, and in Europe.

Read the full market research report

Posted: 31 August 2012

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