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By Erkan Gülhan, Reporter at Otomobilhaber.com
The automotive industry worldwide is undergoing a major transformation. Those who can keep up with the changes will continue to accelerate in the sector, while those lagging behind risk being left in the dust. Industry leaders are voicing their concerns, noting the intense competition and emphasizing that what we are witnessing is now a full-fledged battle.
During a recent meeting in Istanbul, Yakup Birinci, the President of the Automotive Suppliers Association (TAYSAD), met with former President Albert Saydam to discuss the state of the industry and the challenges ahead.
The two men sent a clear message that they stand behind each other, stressing that knowledge, expertise, and discipline alone are no longer sufficient for success in this competitive environment.
Albert Saydam reflected on the continuous risks that the industry faces, stating, “Some sectors or industry players are reaching the end of their lifespan, and some countries are facing a similar fate. We’re losing our competitiveness. We’re fighting on all fronts to address this.”
The Growing Threat to Competitiveness
Reiterating the risks posed by the current climate, TAYSAD President Yakup Birinci pointed to the impact of policies and regulations, emphasizing the challenges faced by exporters. “Our export business is under significant stress, but the numbers continue to rise.
We need to focus on solutions, adopt more resilient policies to stay competitive,” Birinci said. He highlighted a key point: the results of today’s actions will become evident only in the next two to three years, or even longer. “What we’re doing now will have effects on projects in countries close to us. The impact of losing competitiveness will be felt in 2026-2028,” Birinci added.
Collaboration is the Key
Birinci and Saydam both stressed the need for collective action in the face of mounting challenges. “We must move forward together. It’s not just about TAYSAD; it’s about working with our members, lawmakers, the government, OSD, customers, and unions,” said Saydam, pointing out that simply defending the current position won’t suffice. “We need to be proactive and fight on every front,” he added.
The End of Traditional Automotive Production?
Saydam also expressed concern about the future of automotive manufacturing in Turkey, noting that even long-standing foreign investors with large operations in the country are reconsidering their presence. “A foreign-invested company with 650 employees in Turkey is already debating whether to continue production here after two years.
Some are even considering closing a factory,” Saydam said. He pointed out that the automotive sector cannot be treated like the textile industry, where production can easily move across borders. “Once a supplier leaves Turkey and establishes production elsewhere, it is bound to that platform for five years. The challenges we face now may be rooted in the lack of new vehicle investments,” Saydam concluded.
Alarm Bells for the Future
2017 was a pivotal year for the automotive industry globally, with high expectations for 2018. However, following economic downturns and trade wars, the industry has seen a slowdown. Birinci reflected on the ongoing challenges, stating, “The market is stuck at around 92-93 million units for 2023 and 2024. The situation looks relatively flat for 2025 and 2026.
But there is a potential decline, with figures possibly dropping to 1.4 million units by 2026. This signals that the alarm bells are already ringing.”
Cost Increases and the Strain on Competitiveness
Saydam further elaborated on the cost challenges faced by manufacturers, noting the significant differences in labor costs. “The cost of transporting an employee from Gebze to Çayırova is equivalent to what an Egyptian worker earns in a month. In countries like Romania and Bulgaria, workers rely on public transportation, while here in Turkey, we pay service fees that are as high as their salaries,” Saydam explained.
This disparity in costs is a growing concern for the sector’s competitiveness.
Urging for Action: The Need for Infrastructure Investments
Saydam also called on the Turkish Union of Chambers and Commodity Exchanges (TOBB) to support key infrastructure projects, such as the Balo project, which would link Turkey’s Anatolia region to Europe via rail. He highlighted that Europe’s carbon certification costs could reach up to 138 million euros, stressing that the only solution to this issue is to improve Turkey’s logistics and infrastructure.
A New Era of Foreign Investments?
Saydam praised the efforts of Turkey’s Minister of Industry and Technology, Fatih Mehmet Kacır, in attracting new investments, specifically citing the case of Chinese automaker BYD. “Minister Kacır’s persistent efforts in China helped secure a deal for BYD to enter the Turkish market, which previously seemed unlikely,” Saydam noted.
He also mentioned the importance of the upcoming investment in Samsun, highlighting that government support played a crucial role in making it happen.
Chinese Brands and the Future of the Automotive Industry
Birinci also shared his thoughts on the rise of Chinese automotive brands, noting that the model Toyota used decades ago is now being replicated by Chinese companies in the electric vehicle sector.
“Chinese brands are trying to offer a wide range of models, just as Toyota did with different variations of cars on the same production line. This approach is gaining traction in the electric vehicle market,” Birinci explained, suggesting that this strategy may help these brands become significant players in the global automotive market.
Personal Commentary by Erkan Gülhan
The automotive industry is facing unprecedented challenges, and the calls for unity and action from industry leaders like Yakup Birinci and Albert Saydam are both timely and critical. It’s clear that the industry must adapt or face serious consequences.
The looming risks in competitiveness, cost structures, and market changes make it imperative for both Turkish manufacturers and foreign investors to rethink their strategies. The future may hold difficult times, but it also offers opportunities for those who are willing to evolve and innovate.
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