The European Union’s newly announced automotive support package, which ties incentives and subsidies to the condition of being “Made in EU,” marks a critical juncture for Türkiye’s automotive industry.
Automotive Manufacturers Association (OSD) President Cengiz Eroldu has warned that excluding vehicles and parts manufactured in Türkiye from this definition would undermine the advantages of the Customs Union and risk rendering the framework ineffective. He stressed that including Türkiye in the definition is a strategic necessity.
The EU’s package, unveiled as a game-changing move for the sector, repeatedly emphasizes the “Made in EU” requirement, raising serious questions for Türkiye. This stipulation threatens not only future exports to Europe but also investment prospects.
Last week, the EU introduced a revised automotive package that postponed the 2035 zero carbon dioxide emission target but reinforced the “Made in EU” clause. Eroldu cautioned that this definition poses significant risks to Türkiye’s investment climate and existing projects.
While the package is presented under the banners of environmental responsibility, emission reduction, and competitiveness, it is widely interpreted as a protectionist industrial policy reshaping the rules of the game. For Türkiye, whose automotive industry accounts for 17 percent of total exports, the implications are severe. The package offers flexibility on emission targets, support for battery production, reduced administrative burdens and incentives for small electric vehicles — but all hinge on the prerequisite of being produced within the EU.
This approach creates a scenario where Chinese manufacturers investing in Türkiye would face restrictions on exporting to Europe unless they also produce batteries locally, a development that could even call the Customs Union into question.
Eroldu expressed deep concern, saying, “The European Commission has made clear its intention to provide special financial incentives for zero or low-emission vehicles ‘Made in EU,’ covering 60 percent of the passenger car market and 90 percent of the light commercial vehicle market. The definition of ‘Made in EU’ is therefore of critical importance. Scheduled for consultation on Jan. 28, 2026, this definition will initially affect the automotive industry but is expected to shape broader industrial policy across all sectors.”
“Excluding vehicles and parts manufactured in Türkiye from this definition would eliminate the advantages of the Customs Union and render it dysfunctional. As a Customs Union partner, Türkiye must be evaluated equally within the ‘Made in EU’ framework to ensure it is not excluded from incentive mechanisms,” he added.
“For the competitiveness of both Turkish and European automotive industries, Türkiye’s inclusion is a strategic imperative,” Eroldu said.
