Europe’s auto industry can’t exclude Türkiye, says OSD head

ISTANBUL

With the European Union preparing to redefine the “Made in EU” designation in the automotive sector, the head of Türkiye’s Automotive Manufacturers Association (OSD), Cengiz Eroldu, has stressed that Türkiye remains an integral part of Europe’s automotive supply chain.

He warned that excluding Türkiye would not be sustainable for the European industry.

The European Commission is set to discuss new vehicle labeling rules on Jan. 28, which will indicate whether a car is produced inside or outside the EU.

Initially presented as a labeling measure, the regulation is widely seen as part of Europe’s broader effort to shield its automotive industry from the growing presence of Chinese electric vehicles. However, Türkiye’s exclusion from the “Made in EU” definition could pose significant risks for both the industry and the Turkish economy.

Highlighting the interdependence between Türkiye and the EU, Eroldu noted that 70 percent of Türkiye’s automotive exports go to the EU, while Türkiye’s accounts for 8 percent of the bloc’s total automotive exports.

“Türkiye is a complementary production hub for European manufacturers in terms of vehicle production and supplying parts. We do not expect the ‘Made in EU’ issue to negatively affect Türkiye, but it is a risk that must be closely monitored. A European automotive industry without Türkiye would struggle to survive,” he said.

Despite its strong export ties, Türkiye continues to run a trade deficit in automobiles. OSD data show that in 2025, the deficit reached $7.7 billion, while the domestic market share of locally produced cars fell to a historic low of 29 percent. This trend underscores the ongoing pressure of imports on car prices.

Eroldu pointed out that exchange rate and inflation disparities have weakened competitiveness, but argued that the industry’s challenges should be addressed through efficiency gains rather than complaints. He emphasized the need for main manufacturers to guide the supply industry and praised the Industry and Technology Ministry’s model factories as a valuable infrastructure.

While acknowledging the importance of government support, he underlined that the industry must also take responsibility. “Türkiye’s balance sheet is more important than the balance sheets of individual companies,” he said, calling for a balanced relationship between industry and government.

In 2025, OSD members invested $1.2 billion in Türkiye, with Ford Otosan, Oyak Renault, Tofaş, Hyundai and Otokar leading the way.

Eroldu noted that the results of these investments began to materialize last year and added that production, exports and market performance in 2026 are expected to remain in line with 2025 levels.