Automotive Exports May 2025

Monthly automotive aftermarket magazine
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The EU is planning to focus on accelerating high-tech innovation and providing
flexibility in decarbonization while working towards ensuring the global
competitiveness of the automotive industry with both structural and financial
measures.
The EU’s green transformation policies signify a great opportunity for the Turkish
auto sector. The Turkish automotive industrialiasts and exporters have already
taken steps towards producing alternative fuel vehicles. They are producing hybrid,
battery-electric, and internal combustion engine technologies together within the
framework of flexible systems.
These processes could be regarded as a significant threshold to attract foreign
investments, thereby increasing the sustainability and the strategic contribution of
future investments,
Electric vehicles (EVs) have attracted remarkable interest in recent years in Türkiye
as well as around the world. This interest is a result of both environmental concerns
and steps towards energy independence. Türkiye has been implementing various
policies and incentives to grow the EV market and become a hub in this field.
The auto supply industry aims to boost its export revenue to around $15-16 billion
this year, according to the Uludağ Automotive Industry Exporters’ Association
(OİB). The automotive industry set an all-time record with exports totaling $37.2
billion in 2024, while export target for 2025 at $39 billion. Considering that the
supply industry accounts for an average of 40 percent of total automotive exports,
it is estimated that the supply industry will reach an export figure in the range of
$15-16 billion dollars in 2025.
Key factors which attract foreign capital inflows to Türkiye mainly include the
market size, consumer composition, friendly investment legislation and banking
system together with other attractiveness arising from highly skilled human
resources in production and management, the unsaturated domestic market
with high potential, easy access to neighboring (regional) emerging markets, and
relatively low labor cost.
This month, we participate in MIMS Automobility 12-15 May 2025, Moscow, Russia
in order to convey the messages of the Turkish automotive exporters in an efficient
manner.
Our publications remain at the service of those businesses people seeking to
increase their share in the increasingly competitive foreign markets.
We wish them lucrative trade.
automotiveexport
EDİToR
The great opportunities for the
Turkish automotive industry
automotiveexports

Turkish auto sector shifts gears
for green transformation
May 2025
ITürkiye’s automotive industry is adapting to the
European Union’s ambitious green transformation
efforts in a bid to stay competitive and enhance its
export potential, a sector representative told Anadolu
Agency. The EU is moving forward with its industrial
action plan for the auto sector by establishing three
large-scale cross-border test sites
and regulatory testing zones, as
well as increasing the readiness and
commercialization of self-driving
cars. As part of its research program
Horizon Europe, the EU will allocate
€1 billion ($1.1 billion) for the auto
sector between 2025 and 2027.
The funds will be directed toward
boosting demand for zero-emission
vehicles, establishing heavy-vehicle
charging centers, and expanding
financing for charging infrastructure.
An additional $2 billion will support
battery production and recycling
initiatives.
The EU also plans to secure access to critical minerals
and expand into new markets through free trade
agreements and strategic partnerships. The bloc is
currently investigating unfair trade practices and may
impose tariffs and other measures on Chinese electric
vehicles (EVs) if violations are found.
6

Auto supply industry targets for
$16 billion in exports this year
The auto supply industry aims to boost its export
revenue to around $15-16 billion this year, according
to Baran Çelik, board chair of the Uludağ Automotive
Industry Exporters’ Association (OİB).
Çelik stated that last year, the automotive industry set
an all-time record with exports totaling $37.2 billion.
“We have set our automotive industry’s export target
for 2025 at $39 billion. Considering that the supply
industry accounts for an average of 40 percent of total
automotive exports, we anticipate that the supply
industry will reach an export figure in the range of $15-
16 billion dollars in 2025,” he said.
In 2024, the supply industry achieved a foreign sales
figure of $14.9 billion, an increase of 5.18 percent from
the previous year, according to Çelik.
The supply industry’s largest export market was
Germany at $ 3.2 billion, while shipments to the U.S.,
the second-largest market, surged 20 percent annually
to surpass $1 billion, Çelik said.
Çelik highlighted that the supply industry made the
greatest contribution to the automotive sector, followed
by passenger and commercial vehicles.
The Turkish supply industry exports parts to
OEMs (original equipment manufacturers) and the
aftermarket, he said.
“There is incredible dynamism and growth in
our supply industry, particularly in exports to the
aftermarket. We believe we will reach much larger
record export values in the aftermarket in the coming
years,” Çelik added.
May 2025
8

Global electric vehicle sales projected to surge in 2025
May 2025
The global electric vehicle (EV) market is poised for
another year of strong growth, with sales expected
to surpass 20 million units in 2025 — an 18 percent
increase from 2024, according to leading EV research
firm Rho Motion.This growth comes amid shifting
legislative landscapes in key regions, with China
leading the charge, the EU enforcing stricter emissions
standards, and North America adjusting to policy
changes under the Donald Trump administration.
Describing 2025 as “the year of legislation,” Iola
Hughes, head of research for Rho Motion, said: “The
EU is seeing emission targets come into place, Trump’s
presidency promises change for the U.S. and China
continues the popular trade-in scheme. Still, we
anticipate a steady year of growth across all regions,
with China continuing to lead the charge.”
China is projected at the forefront of the EV revolution,
with projected sales of 12.9 million units in 2025,
marking a 17 percent increase from 2024.
The European market — the EU, European Free Trade
Association and the U.K.— is predicted to recover
from a difficult 2024, during which sales declined by 3
percent compared to 2023.
New emissions standards coming into effect are
expected to drive a 15 percent year-on-year growth,
with 3.5 million units projected to be sold in 2025.
In the U.S. and Canada, the EV market is foreseen to
grow by 16 percent in 2025, with sales at 2.1 million
units.
“Following his inauguration, President Donald Trump’s
legislative agenda is in full swing and though the
removal of EV tax credits is going to impact the longterm
market, little change will be seen this year as the
electrification of vehicles is here to stay,” Hughes said.
10

From Hatay to the world:
YAR-ZEM’s journey in global spare parts trade
With deep roots in Antakya and over three decades of experience, YAR-ZEM Automotive
has evolved into a trusted international wholesaler—supplying spare parts for leading
commercial vehicle brands across Asia and Africa.
My name is Sabah Kapı. I was born on January 1,
1970, in the Samandağ district of Hatay, Turkey. I
currently reside in Antakya, and I am married with three
children.
I entered the automotive spare parts industry in 1994.
Since 2008, YAR-ZEM Automotive Ltd. Co., based
in Antakya, Hatay, has specialized in the wholesale
supply and distribution of spare parts for IVECO and
Mercedes-Benz commercial vehicles.
Thanks to our industry experience, in 2010 our
company expanded its product range by including
parts for DAF, Volvo, Renault Trucks, Ford, and Scania
vehicles, marking a significant transformation in our
service portfolio.
At YAR-ZEM Automotive, our primary goal is to meet
our customers’ needs through our extensive product
range and to deliver high-quality, high-standard
products in the most efficient and flawless way—
always mindful of the value of time.
As we move forward with determination toward our
goals, we have extended our customer base beyond
national borders. Today, we export to countries across
Asia and Africa, including Lebanon, Iraq, Saudi Arabia,
Egypt, Qatar, Nigeria, Sudan, Iran, Kazakhstan,
Uzbekistan, Ukraine, Azerbaijan, and Congo,
further strengthening our position as a wholesaler in
international markets.
Together with our employees and solution partners,
we continuously improve our processes to provide
competitive, innovative, and world-class services.
Participating in international trade fairs is one of our
key motivations, helping us enhance our corporate
value and contribute to the development of the
industry.
For us, business is not merely a process—it is a
journey of generating value. In every step we take, we
strive to make a difference and build long-term value
for our customers. Our commitment to sustainability
enables us to take actions with a vision that embraces
not only today but also the future.
May 2025
12

Turkish automotive exports to EU hit
nearly $7B as bloc leads in Q1
May 2025
The European Union continued to lead as the top
market for the Turkish automotive market in the first
quarter of this year, as sales have approached nearly
$7 billion, constituting over 70% of total shipments in
the period, according to a report, citing industry data.
The sales to the EU have surged 13% year-over-year to
approximately $6.9 billion in the January-March period,
according to the data compiled by Anadolu Agency
(AA) from Uludağ Automotive Industry Exporters’
Association (OIB) and Turkish Exporters Assembly
(TIM). Meanwhile, total exports of the automotive
sector in the same period increased by 4% compared
to the same period last year, rising from $9.13 billion to
nearly $9.5 billion, according to the data.
The automotive industry, which exported to more than
190 countries, autonomous and free zones in the first
quarter, accounted for 16.8% of the country’s exports
in this period. When looked at on a country basis, EU
countries ranked first in Türkiye’s automotive exports in
the first three months of the year, with a 72.6% share.
Jumping from last year’s $6.1 billion, the shipments
approached the $7 billion mark, confirming the
standing of the bloc as the most important market in
automotive exports.
Germany stood at the forefront as the main market for
the domestic automotive industry, accounting for close
to $1.5 billion of exports in the quarter.
Automotive exports from Türkiye to Germany, which
stood at $1.26 billion in the first three months of last
year, climbed to $1.49 billion in the same period this
year, with an 18% increase.
France, which is again one of the major markets of
the automotive sector and ranked second, received
automotive goods worth $1.1 billion between January
and March, marking a 13% surge year-on-year. France
was followed by exports to the U.K., which, although
a non-EU market, ranked third, while Spain emerged
fourth, being the market where the stunning growth of
68% was achieved.
The exports to Spain rose from $501.5 million to
$841.7 million this January to March, versus the same
quarter last year. On the other hand, exports to Italy,
which came in fifth on the list of top 10 countries
Türkiye exported the most to, declined by 19% to
$772.1 million over the same period.
The other five countries that entered the list were
Slovenia, Poland, Belgium, Romania and the U.S.,
respectively.
14

Incentives for investments in auto
industry given impetus
May 2025
Türkiye will continue to offer support and incentives to
new investments in the automotive industry, Industry
and Technology Minister Mehmet Fatih Kacır has said,
adding that the government will continue to hold talks
with potential investors.
Kacır said that his ministry is implementing various
incentive schemes in order to turn Türkiye into
a regional production base by supporting the
investment environment in high-tech, innovative and
high value-added sectors, including the automotive
sector.
The minister noted that eight of the 13 companies
producing vehicles in the country are global brands.
“We will continue to support them and encourage
them to make new technology investments in
Türkiye,” he added.
The government’s commitment to electric cars and
new technologies has led many global brands such
as Ford, Toyota and Renault, to move their newgeneration
vehicle production to Türkiye, the minister
said.
Talks with companies, which have strong supply links
with the automotive sector, for new investments will
continue in 2025, according to Kacır.
The ministry noted that global brands have invested
$18 billion in the Turkish automotive industry since
2000 and that more than 30 of the top 100 global
suppliers have opened production facilities in Türkiye.
The interest of global companies, including
Chinese firms, in Türkiye has been increasing, he
said, recalling that Chinese BYD announced a $1
billion investment to establish an EV and hybrid car
production plant and an R&D center in the country.
He recalled that Türkiye aims to reach an annual
16

production capacity of at least 1 million electric
vehicles and $5 billion is allocated to support those
efforts. The Turkish automotive industry, which is
the 13th largest producer in the world, is one of the
major driving forces of the economy with an installed
capacity of over 2 million, an export volume of over
$37 billion, providing jobs to more than 550,000
people, he added.
Vehicle production in Türkiye, which was around
300,000 in 2002, has increased nearly five-fold,
reaching over 1.4 million vehicles in 2023, according
to the minister
May 2025
17

Türkiye’s February trade deficit
increases to $7.77 billion
Türkiye’s trade deficit surged by 14.8% year-on-year to
reach $7.77 billion in February, driven by rising imports
and a decline in exports, according to official figures
released.
Exports fell by 1.6% annually, totaling $20.76 billion
in February, while imports increased by 2.4% to
$28.53 billion, the Turkish Statistical Institute (TurkStat)
reported.
When energy products and non-monetary gold are
excluded, the foreign trade gap narrowed by 2.3% to
$19.13 billion over the same period.
The exports-to-imports coverage ratio dropped from
75.7% in February 2024 to 72.8% this year.
In terms of destination markets, Germany remained
Türkiye’s largest export partner with $1.69 billion in
goods, followed by the United Kingdom at $1.25
billion, the United States at $1.2 billion, Italy at $1.09
billion and Iraq at $1.01 billion.
On the import front, Russia led as Türkiye’s top
supplier, accounting for $3.86 billion. China followed
closely with $3.54 billion, while Germany, the U.S. and
Switzerland contributed $2.14 billion, $1.27 billion and
$1.23 billion, respectively.
May 2025
22

Türkiye plans to launch homegrown
navigation, map system
May 2025
To curb its foreign dependence on strategic
technologies and infrastructure, Türkiye will establish
the Regional Positioning and Timing System (BKZS)
to launch its homegrown GPS and map application,
according to a report.
Türkiye aims to ensure its cybersecurity with the rise
of widespread automation in industrial production, an
Anadolu Agency (AA) report said, referring to the “2030
Industrial and Technology Strategy” of the Industry and
Technology Ministry.
In this context, cybersecurity solutions to be developed
via the country’s own means will make Türkiye a strong
player in digital transformation.
The navigation and map system, the BKZS, will be
commissioned to allow Türkiye to provide precise
location and navigation data via its own satellites to
release an alternative to global systems like the GPS.
The system is planned to be utilized for the security
of military operations, uninterrupted civilian
communications, smart transportation systems,
precision agricultural applications and more.
In this direction, it is envisaged to take steps such
as a pre-feasibility study, atomic clock development,
increasing the durability of existing systems, satellitebased
augmentation system studies and finally
establishing a regional satellite positioning system.
The qualification tests of the rubidium atomic
clock prototype, produced by the Scientific and
Technological Research Institution (TÜBITAK) National
Metrology Institute and Türkiye’s Space Agency in
collaboration, are underway.
At the same time, the cube satellite’s (CubeSat) design
process is complete, having entered the production
and subsystem procurement stages.
The domestic development of digital platforms, such
as the national navigation system, search engine and
social media, is an important step for Türkiye to secure
its technological independence and data security.
These advancements will bring economic benefits to
the country and the Turkish entrepreneurs operating
in these areas. A local map and navigation app will be
developed to meet the needs of transportation, urban
planning and cultural activities specific to Türkiye.
Türkiye also aims to develop next-generation
applications using the Turkish large language model
(LLM) and artificial intelligence (AI).
24

Japanese carmaker Honda to shift
production of Civic model to US
May 2025
Japanese auto giant Honda announced that it will
transfer production of its hybrid Civic model from
Japan to the United States as early as June or July,
just ahead of U.S. President Donald Trump hosting a
Japanese envoy for talks on tariffs.
A spokesperson for the Japanese automaker
emphasized that the rationale behind the shift “is
not a single issue,” adding that the decision aligns
with Honda’s long-standing policy of manufacturing
vehicles in markets where demand exists. “The
decision is based on the company’s policy since its
foundation that we produce cars where the demand
is,” the spokesperson said.
Under the Trump administration’s recent policy shift,
Japanese imports—particularly automobiles, steel,
and aluminum—have been subjected to a 24% tariff.
Japan, along with several other countries, received
a 90-day reprieve, with China notably excluded.
Imports from China now face tariffs of up to 245%,
as Washington moves to address what it describes
as unfair trade practices and imbalanced economic
relationships.
The announcement coincides with Japan’s intensified
diplomatic outreach to the U.S. over newly imposed
trade barriers, as President Trump stated in a Truth
Social post that he would meet with a Japanese envoy,
noting that Japan is the largest investor in the United
States.
Economic Revitalization Minister Akazawa Ryosei has
traveled to Washington for high-level tariff negotiations,
where he is scheduled to meet with U.S. Treasury
Secretary Scott Bessent and Trade Representative
Jamieson Greer.
Akazawa told reporters ahead of the meetings that
Japanese businesses are experiencing daily financial
losses due to the trade measures and said the
government is working urgently to secure meaningful
results. “I am prepared for talks to protect the national
interest,” he stated.
Japanese Prime Minister Shigeru Ishiba also addressed
the issue earlier, declaring that Tokyo would not make
hasty compromises during negotiations, underscoring
that Japan “won’t compromise” in efforts to resolve the
dispute with the U.S.
President Trump’s tariff regime includes a baseline
10% levy on all imports, but individual countries have
been affected at varying levels. Tokyo has repeatedly
urged Washington to exempt Japanese products
from the sweeping measures. In parallel, other Asian
economies are also taking steps to address their
own tariff challenges. A senior-level delegation from
Indonesia departed for Washington following the U.S.
decision to impose a 32% tariff on Indonesian goods.
South Korea’s Finance Minister Choi Sang-mok is also
expected to hold talks with Secretary Bessent as Seoul
seeks relief from similar trade pressures.
26

MIMS Automobility
12-15 May, 2025 Moscow, Russia
International Exhibition of Automotive Parts and Components
May 2025
MIMS Automobility Moscow is the
leading exhibition of automotive
spare parts, automotive components,
equipment and vehicle maintenance
products in Russia and Eastern Europe.
MIMS Automobility Moscow (Int’l
Exhibition of Automotive Parts,
Components, Car Maintenance
Equipment and Products) takes place in
Moscow, Russia at Expocentre. Trade
show is organized by ITE LLC Moscow.
In a short period of time, MIMS offers
a complete presentation of the state
of Russian and foreign markets for
automotive parts and maintenance.
At MIMS, experts have an excellent
opportunity to evaluate and test new
28

technical products, receive detailed advice from
manufacturers, perform comparative analysis and
make final decisions regarding purchasing one product
over another.
MIMS Automobility Moscow attracts great interest as
usual
Major product groups to be displayed are:
Parts & Components
Engine, Powertrain, Chassis, Brake System, Steering,
Body and its elements, Lights&lamps, Standard
mechanical parts (fasteners, seals, bearings), Interior,
Tires, wheels, Filters, Regenerated, restored and
renewed parts for cars and utility vehicles
Diagnostics & Repair
Diagnostic and repair equipment, Tools, Bodywork
repairs, Paintwork and, Anticorrosion protection,
Tire repair and retreading, Warehousing and storage
systems
Accessories & Customizing
General accessories for motor vehicles, Technical
customizing, Visual customizing, Infotainment and Car
IT systems
Batteries & Electronics
Engine electronics (control units, sensors, actuators),
Vehicle lighting, Electrical systems (electrical power
supply, cables, wiring harnesses, cable mounting and
connecting elements, plug connections, sensors, onboard
diagnostics, high-voltage systems), Batterie
Oils, Car Wash & Care
Oils, Coolants and additives, Lubricants and fluids,
Washing, Washing stations, Washing equipment,
Vehicle care, Detailing
Management Software & Digital Solutions
Sales and service management (dealer management
systems, special applications and equipment),
Digital marketing software for auto dealers (mobile
and stationary solutions), Dealer customer data
management (data analysis and management, big
data)
Connectivity
Autonomous cars, Connectivity (car-to-car, car-toenterprise,
car-to-infrastructure, car-to-driver, LTE,
functions on demand)
Alternative Drive Systems & Fuels
Electric vehicle solutions, Alternative fuels, Human
machine interface (HMI) (eye tracking, facial expression
tracking, gesture control systems)
May 2025
30

Too Lema Global Logistics – Carrying with Care
May 2025
Specialized in transportation, particularly to Eastern
countries and Europe, Too Lema Global Logistics
provides reliable logistics services. We conducted an
exclusive interview with a company official to learn
more about their operations.
Can you tell us about the foundation and
development process of your company?
Our company, TOO LEMA GLOBAL LOGISTICS, was
founded with 25 years of experience as a traditional
family business in the logistics sector. With our
extensive knowledge and expertise in Russia and
Central Asia, we continuously update and improve our
development processes to meet customer needs and
cargo requirements.
How did you decide to provide logistics services
for the automotive spare parts and home textiles
industries?
Our company entered the automotive and textile
sectors due to increasing demand from various
industries. Over the years, companies we have worked
with recommended us to their business networks,
which led us to specialize in these sectors.
What are the main export markets you serve?
We operate in all regions without any geographical
restrictions. However, if we were to list our strongest
regions and countries, we would start with China,
followed by Kazakhstan, Kyrgyzstan, Turkmenistan,
Azerbaijan, Russia, Mongolia, Turkey, and all European
countries, where we provide full and reliable service.
What modes of transportation (road, sea, air, rail)
do you use in your logistics processes?
We primarily use road transportation. However, based
on customer requests and offers, we also provide rail,
air, and sea transportation services.
What are the most important services you offer
to your customers? (Storage, customs clearance,
distribution, etc.)
We offer storage, customs clearance, and final
destination distribution services for customers who
require transshipment of their cargo. These services
are available in all the countries we operate in.
What technological solutions do you use to ensure
fast and reliable delivery?
To ensure fast delivery, we determine the most
suitable vehicle and route, carefully check customs
documents, and dispatch the truck at the same hour
the order is placed. For reliability, we use GPS tracking
and maintain constant communication with drivers.
32

Additionally, we have dedicated staff monitoring each order and trip to
keep customers informed in real-time.
What are the biggest challenges you face in logistics processes for
the automotive spare parts and home textiles industries?
Rather than singling out the automotive and textile industries, we can
say that one of the biggest challenges in all sectors is the inaccurate
reporting of cargo dimensions and weight. When these details are
incorrect, it affects the selection of the transport vehicle, causing
delays, additional costs, and operational inefficiencies. This often leads
to conflicts between buyers and sellers. Based on our experience, we
always strive to provide flexibility and solutions to our customers.
What strategies have you developed to overcome these challenges?
Every job and order present new challenges for us. Our main priority
is ensuring that cargo arrives on time as promised. To achieve this,
we leverage all technological advancements and regional operational
capabilities available to us.
How have recent global changes in the logistics industry impacted
your operations?
Looking at recent years, the COVID-19 pandemic has highlighted the
critical importance of the logistics sector worldwide. The value of reliable
and experienced logistics companies has been recognized more than
ever. Unfortunately, our industry still faces many challenges. However,
relying on our family’s experience in the sector, we have strengthened
our company further. We have improved our workforce quality, increased
staff numbers, and enhanced our operations with digital software
solutions. These improvements have enabled us to monitor shipments
in real-time, quickly resolve issues, and ultimately enhance our service
quality while maintaining seamless cooperation with our customers.
May 2025
33

Türkiye’s auto market shifts gears as
EVs, hybrids test gasoline cars
Changing global automobile trends are also making
their mark on the dynamic Turkish market. The longdominant
position of gasoline-powered vehicles in new
car sales within the country is now being challenged
by electric and hybrid models, according to a report,
citing industry data.
Gasoline cars, the longtime market leader, are now on
the verge of losing their top spot to fully electric and
hybrid vehicles. In the January–March period of this
year, the gap between sales of electric-hybrid cars and
gasoline cars continued to narrow rapidly.
Some 93,478 fully electric and hybrid cars were sold in
the first three months of the year, compared to 111,053
gasoline-powered cars, according to data compiled by
Anadolu Agency (AA) from the Automotive Distributors
and Mobility Association (ODMD). During this period,
fully electric and hybrid vehicle sales increased by
nearly 90%, while gasoline car sales fell by 29%.
In the same period in 2024, electric-hybrid car
sales totaled 49,687, and gasoline car sales stood
at 156,396. In the equivalent period of 2023, those
numbers were 23,544 and 117,650, respectively.
Meanwhile, total car sales in Türkiye during the
January–March period of 2025 decreased by 4.1%
compared to the same period last year, totaling
223,793 units, while light commercial vehicle sales fell
15.5% to 52,491.
‘Major transformation’
However, despite the overall contraction in the car
and light commercial vehicle market in the first quarter
of this year, electric car sales continued to rise.
Compared to the same period last year, electric vehicle
sales increased by 79% to reach 29,594 units. Like
this, the share of fully electric vehicles in total car sales
rose from 7.1% to 13.2%.
Responding to questions from AA, BYD Türkiye
General Manager Ismail Ergun said the automotive
industry is experiencing one of the deepest
transformations in its history.
Ergun stated that electrification is at the core of
this transformation, explaining that this “major
transformation” is reshaping not only vehicle
technologies but the entire ecosystem – from
production to infrastructure.
He cited that when looking at the global electric vehicle
market, “we see a seventeenfold increase from 2016
to 2023, reaching 14 million units.” He added that this
figure by the end of 2024 reached 17.1 million.
“In the first quarter of 2025, around 3.9 million electric
vehicles are estimated to have been sold globally.
May 2025
34

These figures give us an idea of the speed of this
transformation. The International Energy Agency (IEA)
predicts that this growth will continue without slowing
down. By 2030, one in three vehicles on the road in
China, and one in five in Europe and America, will be
electric. All of this shows that electric mobility is rapidly
being adopted not just in select markets, but globally,”
he explained.
At the same time, he also highlighted that Türkiye
is quickly strengthening its position in this global
transformation. While electric vehicles accounted for
less than 1% of total sales before 2022, they managed
to capture a 10% market share by the end of 2024.
“In the first quarter of 2025, electric vehicles achieved
a nearly 13% market share with sales nearing 30,000.
Turkish consumers’ quick adaptation to electric
vehicles and new technologies and their interest in
innovation have been key drivers in this shift,” said
Ergun.
“With the contributions of other players in the industry,
we predict that electric vehicles will hold an 18%
market share in Türkiye by the end of 2025,” he added.
Ergun also noted the remarkable momentum of plug-in
hybrid vehicles in Türkiye. While about 2,500 units were
sold in 2023, this number reached 10,000 in 2024 –
partly thanks to BYD.
BYD has bolstered its presence in the Turkish market,
capturing a strong interest from customers, while also
agreeing on a major $1 billion investment in production
in the country.
“With 9,400 units sold in the first quarter of 2025 alone,
plug-in hybrids have already caught up with the entire
2024 total. As more brands introduce models, plug-in
hybrids are expected to hold a significant place in the
market,” he furthered.
“This rapid transformation in the automotive sector
presents opportunities for manufacturers, tech
developers, and public authorities.
Hyundai Motor Türkiye General Manager Murat Berkel
also emphasized that the demand for electric vehicles
is rising not only in Türkiye but also globally.
“Globally, 3.5 million electric vehicles were sold in
the January–March period, with more than 2 million
of those sales coming from China. A quick estimate
suggests that more than 20 million electric vehicles will
be sold in 2025. Just five years ago, the market share
for electric vehicles was 5%; now, it is expected to
reach 25% this year,” said Berkel.
He also mentioned data for the Turkish market, and
said that Hyundai alone sold 1,228 fully electric
vehicles during the first quarter.
With their share in electric vehicle sales reaching
8.2%, Berkel added: “Our goal is to increase both our
electric vehicle sales and market share compared to
last year. The rise in the electric car market naturally
expands the supply chain and brings new players
into the ecosystem. While brands are increasing their
investments in the country, electric vehicle production
has become a key topic in Türkiye.”
“As Hyundai Motor Türkiye, we plan to begin
production of a fully electric model at our Izmit
factory starting in 2026,” he also said, referring to
the company’s recent announcement to include the
production of an EV model in addition to other models
being produced in the country.
“This production will increase diversity in both
employment and the supply industry. As the electric
vehicle ecosystem expands, the connection between
tech companies and the automotive industry will
become even stronger,” he explained.
He also highlighted the importance for the supply
industry to adapt to the transition to electrification and
the resulting growth.
“In addition, as electric vehicles become more
widespread, there will be a greater need for qualified
personnel at authorized service centers. Naturally, this
will allow related educational institutions to expand
and produce additional employment opportunities. The
future is electric – and with it, many new business lines
will emerge,” he concluded.
May 2025
36

FDI inflows surged more than
90 percent in January-February
May 2025
Foreign direct investment (FDI) inflows into Türkiye
surged by 92 percent in the first two months of 2025
from a year ago to $2 billion, according to a report by
the International Investors’ Association (YASED).
Since 2002, Türkiye has attracted a total of $276 billion
in FDI. Real estate sales accounted for 13 percent of the
total FDI inflows in the January-February period.
In February alone, the country recorded $417 million in
FDI inflows via equity capital, $134 million through real
estate sales to foreign nationals and $28 million through
debt instruments.
However, divestment lowered the overall FDI inflows by
$18 million, according to the report.
Consequently, the total inbound FDI to Türkiye was
$561 million in February. The amount of FDI received
in February 2025, however, declined by 61 percent
compared to the previous month, but FDI inflows rose
by 205 percent compared to the same month of the
previous year. The wholesale and retail trade sector got
ahead of the others and secured a significant share,
amounting to 26 percent, with an inflow totaling $110
million, the report said. In the first two months of 2025,
FDI inflows into this sector amounted to $780 million.
Following that, ICT, financial and insurance activities,
rubber and plastic products and professional, scientific
and technical activities surpassed other sectors and
entered the top five, capturing a combined total of 45
percent of the total equity capital inflows.
From January to February, FDI inflows into the financial
and insurance activities amounted to $132 million or 10
percent of the total inward equity investment.
In February, the Netherlands emerged as the leading
source, accounting for 24 percent of FDI inflows,
followed by the United States with 20 percent and
Switzerland with 12 percent. The shares of the United
Kingdom and Azerbaijan were 8 percent and 7 percent,
respectively. In February, Türkiye posted a current
account deficit of $4.4 billion, the Central Bank data
showed on April 14. The 12-month rolling current
account deficit was $12.8 billion in February, widening
from $11.76 billion in the previous month. In the first two
months of 2025, the current account deficit came in at
$8.4 billion.
“We expect the current account deficit to be lower than
our target in the medium-term program this year, due to
the decreasing energy prices,” Finance Minister Mehmet
Şimşek said, commenting on the latest data.
In the program, the government projects that the current
account deficit will be $28.6 billion, or 2 percent of the
estimated GDP, this year.
40

Used vehicles market shrinks
in first quarter of 2025
In the first quarter, the second-hand car market in
Türkiye contracted by 3.4 percent compared to the
same period in the previous year, with sales at 1.63
units. During the same period, the total second-hand
vehicle market, including motorcycles, minibuses,
buses and other vehicles, also shrank by 3.97 percent
to 2.4 million units.
In March, the used car market shrank by 4.37 percent
annually to 555,093 units. But this pointed to a
recovery from the previous two months. Sales in the
used car market amounted to 551,610 units in January
and 520,697 units in February.
Automotive distributors launched campaigns for new
vehicles in the first quarter of the year to deplete
vehicles in their inventories.
The ongoing high consumer demand, driven by
concerns that promotions in the new vehicle market
and prices would increase, led to a contraction in the
second-hand car market, according to experts.
In addition to the promotion campaigns launched in
the new car market, the contraction in the used hand
car market is also due to the fact that the listing prices
of 1- to 3-year-old used cars are still higher than
expected. Some vehicles are still being listed at the
same price as new models or only slightly lower.
In the first quarter of 2025, combined sales of new
passenger cars and light commercial vehicles declined
by 6.5 percent year-on-year to 276,284 units.
Passenger car sales in the January-March period
declined by 4.1 percent annually to 223,793 units,
according to data from the Automotive Distributors’
and Mobility Association (ODMD).
May 2025
42

China’s Chery says seeking
partnerships to expand Türkiye business
Chinese carmaker Chery said it was seeking
partnerships with a third party to expand its business
in Türkiye, but has no plans to build a factory in the
country. The statement came after multiple reports
cited the Turkish Presidency as saying Chery would
invest $1 billion in a manufacturing facility in the
northern Samsun province, with a capacity to produce
200,000 vehicles per year.
President Recep Tayyip Erdoğan presented a certificate
of appreciation to Chery officials at a ceremony in
Ankara. Last year, another Chinese carmaker BYD
announced it would build a plant in western Manisa
province. Chery has swiftly risen to become one of
Türkiye’s top-selling car brands since reentering the
market in 2023.
BYD agreed to build a $1 billion production facility with
an annual capacity of 150,000 vehicles. Its electric
and rechargeable hybrid car production facility, which
is planned to start production at the end of 2026, is
envisaged to employ up to 5,000 people directly.
Alongside Chery, Türkiye has also been in talks with
state-owned SAIC Motor, which owns MG Motor.
Türkiye’s automotive industry currently produces nearly
1.4 million vehicles annually. It exports nearly 1 million
units, and overall automotive shipments stood at $37.2
billion last year.
Türkiye’s own electric vehicle manufacturer, Togg, is
the top EV seller in the country. It has formed a joint
venture with China’s Farasis for battery technologies.
Togg’s assembly line is currently manufacturing T10X,
a C-segment SUV. Besides the SUV, the company
will manufacture four other models – a fastback, a
C-hatchback, B-SUV and B-MPV – by 2030.
Unveiled earlier last year, the fastback sedan, the T10F,
is scheduled to hit the road in the first half of this year.
The company has already started working on the
B-SUV model, which it named T8X. It could unveil it as
soon as this year.
Togg’s production capacity is aimed to reach 100,000
vehicles per year before increasing to 175,000 once
its plant in the northwestern Bursa province reaches
full capacity. The brand aims to manufacture 1 million
vehicles across the five segments by 2030.
May 2025
44

Founded in 1990, Neko Automotive stands
out with over 760,000 product varieties and
exports to more than 45 countries.
May 2025
Established in Istanbul in 1990, Neko Automotive has
been active in the automotive spare parts industry for
over 30 years. Today, the company delivers more than
760,000 product varieties from over 235 brands across
Türkiye and many regions around the world. Neko
Automotive has brought a new dimension to the sector
with its proprietary digital ordering platform, B4B. We
spoke with General Manager Necati Kosova about the
company’s investments, export strength, and future
plans.
Could you briefly introduce yourself and your
company?
“Neko Automotive was established in Istanbul in 1990
as a well-rooted company operating in the automotive
spare parts industry. For more than 30 years, we have
been offering a wide range of products for passenger
cars, light commercial vehicles, and heavy-duty
trucks. While we serve every corner of Türkiye, we also
export to over 45 countries, earning a strong position
in the global market. Quality, reliability, and customer
satisfaction have always been our top priorities.”
Product diversity, digital infrastructure, and
dependable service
What products are included in your portfolio, and
what are their standout features? What kind of
work do you do in product development and R&D?
“Our portfolio includes more than 235 brands and
over 760,000 product varieties. We offer a wide range
of items such as engine parts, brakes, suspension,
electrical and electronic components, filters, and
automotive chemicals. We only supply high-quality,
original, and OEM-standard products to our customers.
In R&D, we invest in digital infrastructure; with our B4B
online ordering platform, we offer fast and practical
solutions. We also constantly update our portfolio by
monitoring emerging needs in the sector.”
Expanding distribution through warehouse
investments
What makes you stand out from your competitors?
“One of our greatest advantages at Neko Automotive
is our wide product range and large stock capacity.
Thanks to our modern warehouses, we ensure fast
and reliable deliveries. Our B4B platform, which
48

reflects our focus on digitalization, provides a userfriendly
ordering experience. With our experienced
team, customer-centric approach, and strong logistics
capabilities, we make a difference in the sector. In
addition, our international partnerships and competitive
pricing strategy offer significant advantages to our
customers.”
Do you have any short-, medium-, or long-term
investment plans?
“In the short term, we are focusing on strengthening
our technological infrastructure and improving our
logistics processes. In the medium term, we plan to
expand our distribution network with new warehouse
investments and to increase our product range. In the
long term, we aim to become stronger in the global
market by opening warehouses and representative
offices abroad, as well as by developing sustainabilityfocused
projects to contribute to the environment.”
A new export route: Middle East and South America
Could you share some details about your export
activities?
“We are currently exporting actively to Europe, the
Balkans, Russia, and Africa. We have strong business
partnerships in major markets such as Germany,
France, and Italy. Our new target markets include
Middle Eastern and South American countries.
We regularly participate in international fairs such
as Automechanika to showcase our products and
innovations. We also actively use digital channels and
local marketing efforts to expand our export network.”
Is there anything in particular you would like to
emphasize?
“At Neko Automotive, we always prioritize quality, trust,
and customer satisfaction. With our investments in
technology and innovation, we help shape the industry.
We act as a strong team together with our employees
and continue to offer reliable and fast solutions to
our customers. Our goal is to further solidify our
leading position in the industry both domestically and
internationally.”
May 2025
49

Türkiye could gain foothold in US with
tractors, auto supply industry
The ongoing tariff tensions are producing 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.
“Since tractors and smaller commercial vehicles are
May 2025
50

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.
May 2025
52

Plant with 200,000
capacity in Samsun to
produce Chery cars
A plant set to be constructed in the Black Sea province
of Samsun, with an annual capacity of 200,000, will
manufacture Chery-brand vehicles, state-run Anadolu
Agency has reported.
Chery’s partners will establish a production facility
to manufacture next-generation electric vehicles and
parts, as well as a mobility technologies research and
development center.
The total investment is expected to be around $1
billion and produce 5,000 jobs, the news agency said.
Chery entered the Turkish market two years ago and
has since sold more than 57,000 cars in the country.
During a ceremony held at the presidential complex
on March 26, President Tayyip Erdoğan presented
a certificate of appreciation to representatives of
companies for their investments to be supported
under the government’s HIT-30 Program, which
included Chery. Last year, the Industry and Technology
Ministry and BYD, the world’s largest electric vehicle
manufacturer based in China, signed an agreement for
a $1 billion investment in Türkiye.
The agreement foresees the establishment of a
production facility for electric and rechargeable hybrid
cars with an annual capacity of 150,000 vehicles,
along with a research and development center focused
on sustainable mobility technologies. The facility is
expected to commence production in 2026, providing
direct employment for up to 5,000 people.
May 2025
54

Türkiye seen
long-term market
by international
investors’
May 2025
Türkiye is seen as a “priority,” long-term market by
international and U.K.-based investors as the Turkish
economy continues its resilient course, the chairman
of the British Chambers of Commerce in Türkiye told
state-run Anadolu Agency.
Chris Gaunt, while attending a seminar titled “Türkiye
- a Regional Growth Platform” in London, stated
that the focus of the event was to assess the mutual
investment opportunities between Türkiye and the U.K.
“I think everybody recognizes that the potential of
Türkiye, both historically and going forward, is still
there — I mean, the fundamentals don’t change,
demographics are strong, [and] the resilience,” he said.
“We recognize [that] Türkiye is not a short-term
investment strategy; it’s a long-term investment
strategy,” Gaunt added.
“We’re not looking at two to three years; we’re looking
at 10 to 15 years and given the strength of the Turkish
economy and its growth over the last 20 years, there’s
still a lot of confidence there,” he added.
Gaunt emphasized that U.K.-based finance, tech,
and other sector firms look at Türkiye as a long-term
investment and recognize the country’s high growth
potential.
Gaunt stated that a new free trade agreement
(FTA) between Türkiye and the U.K., which is being
negotiated, will expand the two countries’ bilateral
trade to new sectors, especially in agriculture,
education, health and technology.
These new sectors will open up new opportunities
with British investors and send a strong message to
other investors who consider Türkiye as an investment
destination, he added.
Gaunt stressed that Türkiye’s defense industry is at an
advantage now, thanks to its growth and the EU and
the U.K.’s plans to increase defense spending.
58

BYD aims to sell 50,000 cars in
Turkish market this year
Chinese BYD, the world’s leading EV maker, aims to
sell 50,000 vehicles in the Turkish market this year,
according to a company executive.
The company hopes to reach this target by introducing
its ATTO 2 model to the local market in the final quarter
of this year.
The positive feedback and high demand from
customers show that BYD is positioned itself in the
right place in Türkiye, said İsmail Ergun, general
manager of BYD Türkiye.
In January this year, the Chinese company sold 2,758
vehicles in the country, according to data from the
Automotive Distributors and Mobility Association
(ODMD).
“Throughout 2025, we will continue to meet this
interest by expanding our sales volumes and service
network,” he stated.
Ergun also said that depending on supply conditions,
they expect to reach their sales target of 50,000 units
by the end of the year.
Last year, the company sold a total of 8,331 vehicles in
Türkiye.
BYD Türkiye’s dealer network and after-sales services
are expanding at the same pace in parallel with the
increase in the number of sales and models, according
to the company executive.
BYD presently has 25 dealers in 19 provinces across
Türkiye, he noted.
“We aim to increase the number of our dealers to
over 50 by the end of 2025 and further strengthen our
service network,” Ergun said.
In July last year, BYD announced a $1 billion
investment to establish an EV and hybrid car
production plant and an R&D center in the country.
May 2025
62

Despite global shifts Türkiye remains
among EU’s top trade partners
Despite global challenges and disruptions caused by
the pandemic, the trade volume between Türkiye and
the European Union maintained a positive momentum
in the past half decade, increasing substantially over
the years.
Looking at the last year, Türkiye kept its position as
the fifth largest partner of the EU, continuing the trend
seen in 2023. Moreover, it was observed that its trade
volume with the bloc increased by 59% over the past
five years.
In light of recent security and trade concerns,
particularly originating from the U.S. President Donald
Trump’s tariff rhetoric, Ankara’s role for the Brussels
has came to the forefront.
In response to Trump’s shifting stance toward Europe,
the development related to Russia-Ukraine war, the EU
May 2025
64

sought new partners or aimed to strengthen ties with
existing ones in both economic and defense sectors,
revitalizing dialogue with some countries, including
Türkiye, which is not an EU member.
Despite being a candidate for years and issues such as
visa mechanism, Türkiye’s trade ties with the EU have
been strong, witnessed by the figures as well.
Amid geopolitical tensions and rising protectionist
tendencies in global trade policies, which have
produced significant uncertainties, Türkiye’s place
among the EU’s trade partners has become more
notable in recent years.
EU trade
According to data from the European statistical office
(Eurostat) compiled by the Anadolu Agency (AA),
the EU’s imports from non-member countries fell to
1.715 trillion euros ($1.87 trillion), and exports to these
countries dropped to 1.932 trillion euros in 2020 due to
the COVID-19 pandemic. As a result, the EU’s external
trade volume in 2020 amounted to 3.647 trillion euros.
With the easing of the pandemic’s effects on foreign
trade, the EU’s external trade volume rose to 5.577
trillion euros in 2022. However, due to the economic
recession in the region, this figure dropped to 5.018
trillion euros last year.
At the end of last year, the U.S. remained the EU’s
largest trade partner, with a trade volume of nearly 865
billion euros. China, the world’s largest exporter, holds
the second position in the EU’s external trade, with
trade volume reaching 731.15 billion euros by the end
of 2024.
The U.K. follows with 504.8 billion euros, and
Switzerland comes next with 329.85 billion euros.
Türkiye, on the other hand, ranks fifth with a trade
volume of nearly 210.8 billion euros.
Meanwhile, the EU remains Türkiye’s largest trade
partner.
Recently, Türkiye has developed its relations with EU
member countries through the Joint Economic and
Trade Committee (JETCO) and various reciprocal visits.
Negotiations to update the Customs Union with the
EU have also gained momentum as part of Türkiye’s
commercial diplomacy efforts. Accordingly, these
initiatives appear to be reflected in the foreign trade
figures.
Before the COVID-19 pandemic, Türkiye’s trade
volume with the EU was around 138 billion euros, but
this dropped to nearly 132.6 billion euros in 2020.
In the following years, the trade volume showed a
steady increase, reaching 157.13 billion euros in 2021,
198.4 billion euros in 2022, and close to 207.3 billion
euros in 2023.
Last year, the trade volume, as mentioned reached
210.8 billion euros. Thus, between 2020 and 2024,
the foreign trade volume between Türkiye and the EU
increased by 59%.
May 2025
65

Hyundai plans to begin
EV production in Türkiye from 2026’s H2
May 2025
South Korean car giant Hyundai plans to begin
electric vehicle production at its factory in Türkiye’s
northwestern Kocaeli province in the second half of
2026, the company’s top official announced.
Hyundai’s production of EVs in Türkiye will help the
company increase its share in the European market
and contribute to its goal of selling only zero-emission
vehicles in Europe by 2035, the company said
separately in a press release.
“The EV model, which will be produced at the Izmit
factory in Türkiye, will contribute to Hyundai’s growing
electric product range and support the European
market’s increasing demand for sustainable mobility
solutions,” the company said.
It also said it would continue to produce internal
combustion engine models, in addition to the electric
model.
The firm, which has been operating in the Turkish
market since 1997, recently changed its name from
“Hyundai Assan” to “Hyundai Motor Türkiye,” in line
with its goals of expanding reach in European markets.
Speaking at a meeting where Hyundai shared its 2024
performance and 2025 expectations, Murat Berkel,
the general manager at Hyundai Motor Türkiye,
emphasized the group’s strong global standing while
also citing interest in their models across markets.
“We will start producing EV vehicles in the second half
of 2026. We have a high-tech production facility; work
on electric vehicle production continues at full speed in
our factory,” Berkel said, regarding planned production
in Türkiye.
“We also want to make our mark in Türkiye in
electrification. At this point, as I said, the production
quality in Türkiye is at the highest level,” he added.
“A very nice electric vehicle will be produced here and
offered to Turkish consumers and Europe.”
Referring to the global electric sales, Berkel said it is
“remarkable” they have exceeded 17 million.
“Electric sales were around 2 million units five years
ago. It has increased significantly. Five hundred fully
electric models are sold in the world. It is predicted
that this number will reach 1,000 by 2030,” he said as
part of his remarks.
Also recalling that Hyundai laid the foundations of
the Izmit factory in Türkiye in 1995 and started its
first production in 1997, he said that they’ve been
producing and exporting uninterruptedly for 28 years.
“We have reached very important production numbers
since that day. Hyundai Motor Türkiye continues on its
path with sure steps. We have produced more than 3
million vehicles in 28 years. We produce an i10, i20 and
Bayon every 92 seconds,” he noted.
Moreover, touching upon the rise in electric car sales
in Türkiye, he mentioned that the market increased
to around 100,000 units last year and that they sold
nearly 5,000 electric vehicles.
He also conveyed expectations for the automotive
market in Türkiye to reach 1.1 million units this year,
detailing Hyundai’s goals.
“Our sales target is 65,000 units. We aim to increase
our market share from 5.1% to 5.9%. We aim to sell
over 7,000 electric vehicles,” he said.
On the side of plans for electric vehicle production,
Berkel called it to be “very important news” for the
automotive sector.
“We will be the second brand in Türkiye, apart from
Togg. In fact, we will be the first among foreign brands.
This shows the importance our brand gives to Türkiye,
Turkish manufacturers, and employees,” he said.
Noting that details about the vehicle will be shared in
the coming period, Berkel said the production of their
other models will continue.
“This vehicle will be fully electric, but we cannot
announce which segment it will be in at the moment,”
he concluded.
66

Auto Shanghai showcases new
EV era despite tariff speedbumps
May 2025
The world’s largest auto expo opened its doors in
Shanghai, showcasing the new electric world order
even as mounting trade barriers risk dampening
China’s global ambitions.
With nearly 1,000 exhibitors present, foreign carmakers
are raring to show they can keep pace with the ultracompetitive
Chinese firms that dominate the sector’s
electric frontier.
Vying to shore up sliding sales in a market they used to
dominate, German companies pitched themselves as
building cars “in China for China.”
Volkswagen unveiled a series of new electric vehicles
and a driver assistance system developed especially
for the Chinese digital ecosystem.
The group says it will launch more than 20 electric and
hybrid models for the country by 2027.
At the BMW booth, a foreign executive conducted a
conversation in Mandarin with an AI assistant, before
CEO Oliver Zipse rolled onstage in a futuristic white
SUV from the upcoming “Neue Klasse” series.
A separate version specifically tailored for China will be
launched next year.
Foreign brands are up against cutthroat competition
from dozens of local rivals.
Beijing’s historic backing of EV and hybrid
development has seen the domestic market flourish,
with analysts considering it younger-leaning and more
open to novelty.
Auto Shanghai, which runs until May 2, will see a flurry
of launches, luxury SUVs, saloons and multi-purpose
vehicles.
The domestic contest has pushed Chinese companies
to develop faster and fostered technological
innovation.
However, the effect of the crowded market on
individual companies can be harsh, some start-ups
have already gone bust, while brands including SAIC
Motor, BYD and Geely are engaged in a brutal price
war. Many Chinese automakers have looked to grow
their overseas sales in markets such as Europe, Latin
America and Southeast Asia to safeguard their future.
Last year, China exported 6.4 million passenger
vehicles, more than 50 percent above second-ranked
Japan.
Tariffs will also be on the minds of foreign companies
who make cars in China themselves, such as the
United States’ General Motors and Ford.
Since last year, Chinese carmakers have also faced
extra duties from the European Union, which says state
support has unfairly undercut its own automakers.
However, exports to Russia and the Middle East
have helped cushion these and other tariff impacts,
AlixPartners said.And although the levies will increase
the cost of China’s vehicle component exports by
about 24 percent, “this represents only about 3.8
percent of China’s total auto industry production
value,” it noted.
Other speedbumps are internal.
China’s post-pandemic recovery has wobbled, with
low domestic consumption a persistent issue, while
concerns have been raised about overcapacity.
However, “anyone who says that China is becoming
less important and weaker should look at Shanghai”,
warned German automotive expert Ferdinand
Dudenhoeffer in a note.
“The opposite is true. If our car industry wants to
recapture the successes of the past, it must become
more Chinese.”
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