The automotive sector, which already is Turkey's biggest exporter, by 2023 would have to export parts and vehicles worth an estimated $75 billion, up from $20 billion last year. While that's an ambitious goal, the country's auto industry has enjoyed growing exports in recent years. In 2011, vehicle exports grew 5 percent to 801,112 units. Component exports jumped 26 percent to $8.3 billion, according to Turkey's Ministry of the Economy.
Over the past decade, Turkey has become an attractive export platform for global manufacturers. Some 13 automakers – including Ford, Fiat, Renault, Hyundai, Toyota and Honda – build vehicles in Turkey. Of their combined output, 800,000 units were exported and less than 400,000 sold domestically.
Turkey's automotive export target "is a very tough goal," said Ercan Tezer, general secretary of the Istanbul-based Automotive Manufacturers Association. "But at least we have a clear direction, and we are working to implement a strategy to get there."
The export goal would require Turkish assembly plants to triple annual production to 4 million units, Tezer said. It's a challenging goal – especially in light of western Europe's economic troubles, said Kamil Basaran, CEO of Turk Otomobil Fabrikasi AS (Tofas). Tofas, a joint venture between Fiat and the Turkish industrial and financial giant the Koc Group, builds passenger cars for Fiat and light commercial vehicles for Fiat, PSA/Peugeot-Citroen and Opel/Vauxhall.
Turkish exports have "great potential to grow in central and eastern Europe, as well as into our neighbor countries," Basaran said. Moreover, Turkey can increase
export income by building larger, more expensive vehicles. "Right now, the bulk of the Turkish export comes from subcompact models," Basaran said. "But growing the number of compacts shipped abroad and even expanding to mid-sized models could represent a substantial boost in export revenues."
Turkey's growing economy could take some of the pressure off exports. Last year, the nation's car sales totaled a record 910,867 units, up sharply from 174,442 units in 2002.
But the nation's economy, which grew at a torrid 8.4 percent pace last year, has slowed to 3.5 percent this year.
Likewise, vehicle sales in Turkey declined 12 percent to 558,893 units in the first nine months, a slowdown caused in part by an extremely strong first quarter in 2011.
For the year, industry observers expect sales to decline 10 percent, with a modest rebound in 2013, said Hayri Erce, executive coordinator of the Automotive Distributors' Association. Still, the nation's market fundamentals look good. Last year, Turkey had only 141 vehicles per 1,000 inhabitants. That's slightly below the total in Brazil and well behind Russia, which has 298 vehicles per 1,000 residents.
In addition, Turkish cars and trucks are getting old. Nearly 55 percent of the nation's 8.1 million vehicles are at least 11 years old, with 25 percent more than 20 years old.