At an event in the Turkish city of Gebze held in December 2019, a new chapter of Turkey’s automotive journey began. A crowd of political and business leaders gathered to see a preview version of the first locally-developed fully electric sports utility vehicle (SUV).

“Everyone is at the beginning of the electric and connected automobile race in the world,” Gürcan Karakaş, the CEO of Turkey’s Automobile Joint Venture Group (Togg) said at the event. “We are in the right place at the right time.”


Togg, a consortium of Turkish companies, aims to domestically produce five electric vehicle (EV) models, with the first expected to roll off the production line by the fourth quarter of 2022. It is part of plans to ensure Turkey keeps pace with rapid transformation in the global automotive sector towards electrification and new tech-enabled forms of mobility.

“Togg will be our industry’s milestone, as they will not only develop the car but the whole electric vehicle supplier base,” says Ahu Büyükkuşoğlu Serter, the CEO of Fark Labs, the innovation arm of Turkish automotive supplier Farplas, that will supply parts for Togg’s electric SUV. The mobility-focused R&D centre started in Istanbul, and has since expanded to other sites in Paris and Seoul.

Leveraging its strong base of original equipment manufacturers (OEMs), suppliers and logistics infrastructure, Turkey is positioning itself as a hub for the future of mobility.

Automotive heritage

While Turkey’s automotive industry dates back to the early 1960s, its growth has picked up over the last 25 years. In that time, production capacity has increased threefold, output by five times, while exports have risen to about 900,000 units in 2020, from 205,000 units in 2001, according to the Turkish Automotive Manufacturers Association (OSD).

With the majority of Turkey’s auto industry based in the cities of Izmit, Bursa, Ankara, Izmir and Aksaray, well-developed clusters hosting the whole value chain have formed. 

“Turkey has considerable knowledge and experience in the automotive industry and has reached the position of exporting automotive engineering to the world beyond product development and production,” says Özlem Güçlüer, the secretary general of OSD.

Global OEMs have had a long presence in the country, including Hyundai, Fiat, MAN and Oyak-Renault, and have invested more than €15bn in their Turkish operations since 2000, according to Invest in Turkey. Around 1100 component suppliers support the production of these OEMs, although the rates of parts sourced by OEMs locally varies from 50% to 70%.

Süer Sülün, the president and CEO of Mercedes Benz in Turkey, says that Turkey’s well developed OEM and supplier ecosystem puts it in a strong market position for transformation in the automotive industry.

“This structure could easily adapt to future developments with [Turkey’s] built experience and skilled labour,” he says. 

Mercedes Benz has Turkish manufacturing facilities for trucks, which include a research and development (R&D) centre, as well as an IT service centre in Istanbul, from which it serves customers in more than 40 countries worldwide.

Other firms have R&D centres developing autonomous and hybrid vehicle technologies for global projects, such as Austria-based AVL, which has been in Turkey since 2008 and employs almost 250 people.

Serkan Impram, the managing director of AVL Research and Engineering in Turkey, says that the country’s young population is extremely motivated to create global impact, which is a “critical asset when developing smart technologies in order to shape and define the future of automotive”.

As carmakers shift to EVs, Turkey hopes to maintain its position as a production and export base. In 2018, more than 1.3m vehicles were exported from Turkey, equivalent to 85% of total OEM production in the country, the vast majority of which were destined for European markets.

Ford’s electric expansion

In March 2021, Ford Otosan, a joint venture between Ford Motor Company and Turkish conglomerate Koç Holdings, announced it would invest €2bn into its site in Kocaeli province to support Ford’s electrification strategy in Europe. 

“The Kocaeli plants will become Turkey’s first integrated electric vehicle — including the battery assembly — production facility,” says Haydar Yenigun, Ford Otosan’s general manager.

The plant will produce Ford of Europe’s first commercial EV, the E-Transit, and next-generation models, as the automaker shifts its entire commercial vehicle range to all-electric or plug-in-hybrid by 2024. As part of an alliance with Volkswagen, Ford will also produce the German carmaker's next-generation 1-tonne commercial vehicle in Kocaeli.

“We strongly believe that, in the mid-term, Turkey will be one of the most important manufacturing centres and attractive markets for electric vehicles,” says Mr Yenigun. However, he notes that “green transformation comes at a cost”, and that the Turkish government will need to do more with investments into charging infrastructure, incentives and tax regulations to encourage the industry’s development.

Some global OEMs have exited the Turkish market as part of global restructuring efforts. Honda decided in 2019 to close its assembly plant in Gebze, Turkey along with its UK plant, while Volkswagen recently cancelled plans to open a factory in Manisa.

Ms Güçlüer believes the dynamism of Turkey’s automotive industry will be a great advantage during transformation, particularly thanks to the engineering acumen in the country.

“There is still a long way to go, but we see the energy and belief to transform our industry, in our public administration and the private sector,” she adds.

Electric mobility

Turkish entrepreneurs and engineers are also addressing broader mobility challenges, such as in the commercial capital Istanbul, which is ranked as the world’s fifth most congested city, according to TomTom’s 2020 Traffic Index.

“In Istanbul you can find all modes of transportation – water, air, metro, last-mile [delivery] – so you can test any kind of business model,” says Ms Büyükkuşoğlu Serter from Fark Labs.  

Duckt, a micromobility start-up incubated at Fark Labs in Istanbul, is one success story. The company developed charging stations for electric scooters, which have since been rolled out in Istanbul, Paris and New York. 

While legacy Turkish companies, multinationals and start-ups work on global e-mobility solutions, the domestic growth dynamics are strong too. McKinsey estimates that the total mobility market in Turkey, which includes private vehicles, public transport and shared micromobility, could grow from about $55bn today to between $80bn and $90bn by 2030.

In association with Investment Office of the Presidency of the Republic of Turkey. Writing and editing were carried out independently by fDi Intelligence.

This article was first published in the December 2021/January 2022 edition of fDi Intelligence magazine. Read the online edition here.