The automotive industry has been a major leg in the economic growth model of Turkey’s ruling Justice and Development Party (AKP), which has relied heavily on foreign funds, while encouraging production focused on the domestic market and consumption. Now that this growth model is stumbling, the automotive sector has begun to struggle as well, with production on the decline, coupled with setbacks in foreign trade.

Linked to myriad sectors in the production chain, the automotive industry affects the development of other industries, mainly iron and steel, electronics, software, rubber and plastics, fuel, energy, textiles and chemicals. It is directly linked also to many sub-branches of the services sector such as distributorship, retail sales, insurance, car rental and maintenance and repair. Hence, when the automotive industry picks up, it has an invigorating effect on related sectors, and, conversely, when the automotive industry sputters, it threatens to slow down other segments of the economy.

In 2018, Turkey was the world’s 14th largest producer of motor vehicles. Its output of 1.5 million vehicles, including roughly 1 million cars and 500,000 commercial vehicles, accounted for about 1.5% of the global production of 95 million vehicles. China was the leader with 30%, or 28 million motor vehicles, manufactured last year. The United States was second, yet with less than half of China’s production figure.

In 2012, Oyak Renault dominated automotive production in Turkey, boasting a 54% share. By 2017, it saw its share shrink to 32% as competitors such as Hyundai Assan, Toyota and Tofas stepped up their investments in the country. Toyota’s average share of 15% rose to 24% at the end of 2017 after the company launched a plant in the northwestern province of Sakarya to produce its popular CH-R model for the global market.