Türkiye Is a Major Automotive Manufacturer In The Region

A resilient, fast-growing economy, Türkiye offers business-friendly policies, a deep talent pool and global market access at the nexus of Europe, Asia and Africa to attract sustainable FDI.

A. Burak DAĞLIOĞLU

Investment Office of the Presidency of Turkey, President

Türkiye’s main assets include a strong manufacturing capabilities and logistics infrastructure, which has been constantly improved under the leadership of President Erdoğan since 2003. As a result of strong fundamentals and decisive reform agenda, cumulative FDI inflows to Türkiye reached to USD 240 billion since 2003. Türkiye has become a regional R&D, design, manufacturing, logistics, and management hub of multinationals to run their operations in the wider region.

Türkiye has proven itself as a resilient player of 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 coming to the world stage in the search for alternatives to the Asian-based production network. Türkiye’s export volume stood at USD 36 billion in 2002, climbing to USD 225 billion in 2021. Its share in global exports has surpassed 1% for the first time in its history in 2021. The FDI inflow in 2021 was USD 14 billion which is a clear proof of V-shape recovery to pre-pandemic level. With 11 percent annual GDP growth, Türkiye has been the fastest growing economy in the G-20 countries in 2021.

The globally-integrated nature of the Turkish automotive industry with a yearly export volume of around 25 billion USD provides plenty of opportunities for multinational companies such as Mercedes, MAN, Hyundai, Ford, Toyota, Renault, and Fiat, Türkiye has became a regional center. Global OEMs, together with numerous global suppliers, have built up a very competitive mobility ecosystem in Türkiye in the last 60 years. According to the total vehicle production date in 2021, Türkiye is ranked 4th in Europe and 13th in the world. In addition, Türkiye is ranked first in commercial vehicle production in Europe. It is important for countries to transform their business climate in line with sustainability, digitalization, electrification and decarbonisation agenda. Turkish automative industry has already started transforming through successful policies, incentive programs and commitment to European green deal. In automotive and mobility industry total incentives can reach up to the 70% or more of the total investment amount.

In Türkiye already 12 OEMs and more than 450 tier 1 suppliers are actively operating, and keep investing. Between 2016 and 2021, OEMs in Türkiye have invested over USD 5.3 billion in order to increase their production capacities and to modernize their facilities. Türkiye is a major automotive manufacturer in the region. OEMs have started manufacturing hybrid and EV models in our country. A local consortium also took an initiative to manufacture Europe's first non-traditional born electric SUV branded as TOGG. Supplier network is also transforming their selves. Besides Türkiye has taken an important step in the production of EV batteries. Yet, 3 battery producers having decided to produce lithium ion battery plants in Türkiye, and we see there is an increasing interest that will push more projects to the country. We are able to manufacture hybrid engines, critical components of EVs, charging stations and etc.

In June 2022, Mobility Vehicles and Technologies Roadmap has been published by the Ministry of Industry and Technology, and here are set 8 targets regarding EVs, such as supporting and encouraging the EV production, or being a regional battery production centre. In compatible with these targets, Investment Office of Türkiye aims to act proactively to attract innovative, sustainable, and value-added FDI to Türkiye, and increase the international investment stock.

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