The ongoing tariff tensions are creating a complex global trade environment and reshaping global supply chains where Türkiye sees an emerging opportunity in the United States for its tractors and the automotive supply industry, according to the head of the country's auto manufacturers association.
U.S. President Donald Trump imposed 25% tariffs on imports of vehicles and auto parts earlier this month, causing shock waves across the industry since supplies come from all over the world.
The additional levies do not apply to tractors, minibuses, midibuses, buses, or commercial vehicles weighing over 5 tons, according to Cengiz Eroldu, head of the Automotive Manufacturers Association of Türkiye (OSD).
"Looking at the Turkish automotive industry's relationship with the U.S., we have minimal business in terms of finished vehicles, largely because the U.S. is a geographically distant market for us. We do, however, export parts. On the other hand, tractors, minibuses, midibuses, and to a lesser extent buses could present a relative competitive advantage for us in the U.S.," Eroldu explained.
The auto tariffs widened the global trade war Trump kicked off upon regaining the White House this year in a move auto industry experts expect will drive up prices and stymie production.
Türkiye's annual automotive exports to the United States amount to $1.4 billion, of which $1 billion is accounted for by the supplier industry, according to OSD data.
Tractors contribute $178 million, while buses and minibuses add another $166 million, Eroldu told a press briefing on Monday.
"Since tractors and smaller commercial vehicles are relatively less impacted by the new tariffs, we believe we can further increase our activities in these areas," he said.
According to Eroldu, the U.S. market offers opportunities in specific segments of the automotive industry – particularly in buses, tractors, and trucks – where Turkish manufacturers could enjoy relative competitiveness.
"Trucks and buses, of course, are quite specialized segments in the U.S. market and differ from our domestic products. But the tractor market could present a real opportunity," he said.
Eroldu emphasized that Türkiye could distinguish itself in the U.S. tractor market, especially amid reduced exports from Europe and China.
"In components, Türkiye holds a potential advantage. Still, our exports to the U.S. currently make up only 4% of our total. Even if we were to double that figure, it would still account for just 8%, so the overall impact wouldn't be massive," he noted.
"However, it may be worth noting that Turkish suppliers are already present in the U.S., albeit in small numbers, and their investments and presence could grow."
During the press conference, Eroldu evaluated the automotive sector's first quarter as a period marked by uncertainties and fluctuations.
He said the industry continued its investment momentum, reaching a production capacity of 2.2 million units in 2024, an 8% increase from the previous year.
That figure reaches 2.4 million when the capacity of the homegrown electric vehicle maker Togg is included, he added.
Eroldu said the industry closed 2024 with a production figure of 1.365 million units, 7% lower than the previous year.
He acknowledged the difficulties but emphasized that ongoing investments are expected to bear fruit in 2025 and the coming years.
"We invested $1.2 billion in 2024 alone. Over the past 10 years, the total investment made by the Turkish automotive industry has reached $10 billion," he added.
The sector achieved an all-time high export volume of $37.2 billion last year. Its research and development spending rose 61% from 2023 to TL 21.3 billion, according to Eroldu.
