Cengiz Eroldu, chairman of the Automotive Manufacturers Association (OSD), said the contraction in automotive production during the first six months of the year was “a temporary situation” and that the industry expects a recovery in the remainder of the year.
Speaking at a press conference held in Istanbul last week on the OSD’s first-half results, Eroldu said automotive production declined by 6 percent year-on-year.
“There are two reasons for this. In the first six months, we lost five to six working days due to long holiday periods,” Eroldu said.
He added that some member companies also had to reduce current production while preparing new production lines as part of ongoing investment projects.
“This is a temporary situation, and we expect a recovery in the rest of the year,” Eroldu said.
Eroldu also noted that the share of locally produced vehicles in the domestic market has started to increase as new investments come online. He said both the share of domestic vehicles and overall production figures in Türkiye are expected to improve from 2027 onward.
Highlighting excess capacity in Europe, Eroldu said surplus production had been directed toward Türkiye this year, increasing competition and putting pressure on profit margins in the domestic market.
“Vehicles are being imported from Europe at increasingly competitive prices. While production costs in Türkiye are rising, European manufacturers are able to supply vehicles at lower cost levels. This is good for consumers but challenging for producers,” he said.
Addressing the loss of competitiveness in the automotive industry, Eroldu said exporters were entering a more challenging period.
“We thought the worst would be behind us in 2026, but in the first six months we have seen that the gap between exchange rates and inflation has not narrowed. Like all exporting sectors, the automotive industry is now entering a difficult period,” he said.
Eroldu said local manufacturers have domestic content ratios ranging between 40 and 60 percent, while rising labor and local supplier costs have increased euro-denominated production expenses.
Commenting on the European Union’s proposed “Made in EU” initiative aimed at addressing competition from China, Eroldu reiterated that the draft could harm Türkiye’s automotive and supplier industries in its current form.
The draft includes customs union countries in its scope, while at the same time requiring vehicles to be manufactured within the EU and contain at least 70 percent EU-origin components.
Eroldu said that if Türkiye remains outside the framework, the country’s supplier industry would face significant competitive pressure, which could ultimately weaken the competitiveness of vehicle manufacturers in the medium and long term.
“If such a 70 percent threshold is introduced and Türkiye is excluded, intense competition will emerge among Chinese, Indian, Moroccan, Egyptian and Turkish industries, making it very difficult to secure a share of the market,” he said.
“We see this as a major threat to Türkiye’s automotive supplier industry. It is not acceptable for either the supplier industry or the main automotive industry to remain outside this system,” Eroldu added.
He said CLEPA, which represents Europe’s automotive suppliers, wants to limit the use of components from outside the EU, while ACEA, the European automobile manufacturers’ association, supports including the United Kingdom and protecting only existing investments in Türkiye and Morocco.
“This would prevent new investment from coming to Türkiye and halt the expansion of existing investments. Protecting only vehicle manufacturers is not enough, as suppliers are an integral part of the industry. We do not accept ACEA’s approach,” Eroldu said.
