TSKB Report: Turkey's Automotive Dependency and Chinese Competition Rise in EU Exports

Sectoral Concentration Risk in Export Growth The report titled "Under the Lens: Does Competitiveness Change When the Rival Changes?" published by the Industrial Development Bank of Turkey (TSKB) analyzed Turkey’s export performance in the European Union (EU) market.
According to the report, the strong growth observed in headline data hides a significant concentration at the product level and competitive pressure from China.
While Turkey's total share in EU imports has increased, the report emphasizes that the variety of exported products has decreased over the past year.
This situation poses a risk to the sustainability of exports.
The Dominant Impact of the Automotive Sector In the last one-year period, Turkey's exports to the EU rose by $9.7 billion, partly supported by the parity effect.
However, $5.7 billion of this growth—approximately 59 percent—came from the automotive sector alone.
Automotive, machinery-equipment, and electrical equipment items accounted for 72 percent of the total increase, indicating that exports have become dependent on a limited number of sectors.
Experts warn that a potential contraction in these sectors could rapidly pull down total export figures.
Competition with China and Losses in Traditional Sectors One of the most critical findings in the report is that Turkey lost market share to China in 44 out of 97 product groups exported to the EU.
These groups represent more than 35 percent of Turkey's total exports to the EU.
Market losses have become particularly evident in the textile and ready-to-wear sectors.
The decline in knitted clothing and textile materials has accelerated in the post-pandemic period.
This contraction in traditional sectors is attributed to China's aggressive pricing policies and production capacity.
Opportunities in High Technology and Defense Industry Despite losses in traditional sectors, strategic gains are being made in high-technology areas.
Market share increases are being seen in railway vehicles, aircraft, spacecraft, and defense industry products.
Specifically, Turkey's share in EU imports of arms and ammunition has exceeded 4 percent.
In the automotive sector, the EU's protective policies against Chinese-origin passenger vehicles, combined with the advantages of the Customs Union, continue to create a strategic competitive space for Turkish exporters.