Türkiye's automotive main industry increased vehicle production by 4% in 2025 to 1.42 million units, while total sector exports climbed to a record $41.5 billion, supported by stronger euro/dollar parity and resilient demand from European markets, industry officials said on Monday.
Speaking at the sector’s annual outlook meeting, Cengiz Eroldu, head of the Automotive Manufacturers Association (OSD), said the industry expects production and export volumes in 2026 to broadly match last year’s performance, while closely monitoring forthcoming European Union regulations that could reshape investment incentives.
The draft EU regulation that will provide incentives based on production origin is expected by the end of the month.
Türkiye's automotive exports, including main and supplier industries, rose 12% year-over-year to $41.5 billion, marking an all-time high in value terms. Export volumes increased 4.4% to around 1.06 million vehicles, though still below the 2017 peak of 1.33 million units.
The rise in export revenues was partly driven by the strengthening euro against the dollar, which boosted earnings given that nearly 70% of Türkiye's automotive exports go to Europe, the sector’s largest market.
The automotive industry accounts for roughly one-sixth of Türkiye's total exports, making European demand and exchange rate movements key factors for both output and future investment planning.
Eroldu cautioned that developments in Europe would remain decisive for Türkiye's export-oriented production base, noting that the European light commercial vehicle market contracted by 9% in 2025.
“This decline is effectively a signal that the European economy may weaken further, and we are closely monitoring this trend,” he said.
However, he added that the slowdown in light commercial vehicles would likely be offset by new passenger car investments, including two new models expected to enter production this year by Renault and Hyundai in Türkiye.
“These new investments, brands and products will help absorb the contraction,” Eroldu said.
Although production rose last year, overall output has hovered around 1.4 million units for the past four years, following a record 1.7 million units in 2017.
OSD data show that Türkiye's automotive production has struggled to return to previous highs due to Europe’s slow post-pandemic recovery and the rapid shift toward electric vehicles.
Exports have been unable to return to their previous levels of about 1.3 million units, hovering slightly above 1 million units for the last three years.
Exports of light commercial vehicles, which hold a major share of the sector's production capacity, reached the highest level to date with approximately 435,000 units.
The sector’s foreign trade surplus, which had been a structural strength until 2022, has largely disappeared due to rising imports of passenger cars.
The automotive main industry, which last recorded a foreign trade surplus of TL 8 billion in 2022, ran a foreign trade deficit in 2023 due to the sharply rising automobile imports.
According to the latest available data, Türkiye's passenger car trade deficit widened to $7.7 billion in January-November of last year, contributing to a $0.5 billion overall deficit in the automotive main industry during the same period.
Eroldu described the situation as a structural challenge.
“That imports exceed exports in passenger cars is an issue the automotive industry must take direct responsibility for,” he said. “Increasing automotive investments in Türkiye and offering more domestically produced cars to the local market is critically important.”
Following new investments, Türkiye's automotive production capacity increased from 2 million to 2.2 million units, but the capacity utilization rate fell by 3 percentage points to 67%, a level Eroldu described as unfavourable for competitiveness.
“Our goal is to push utilization higher with the investments we make. If we can do that, it will provide a significant boost to our competitiveness,” he said.
The decline was partly driven by a sharp slowdown in tractor production, where capacity utilization dropped 26 points to 35%, reflecting weakness in the agricultural sector. In addition, rising demand for imported trucks pushed truck capacity utilization down 14 points to 57%.
In Europe, passenger car sales rose 2% to 12.1 million units in 2025, while light commercial vehicle sales fell by 9% to 1.4 million units.
The European Union and non-EU European countries account for around 70% of Türkiye's vehicle exports, while Türkiye itself imports roughly 8% of Europe’s total vehicle exports, making it the continent’s fourth-largest market.
