The history of the car and the past, present and future of the automotive industry in Turkey

The automobile entered human life in 1886 with the licensing of the Benz Motorwagen. Initially produced with electric and steam engines, it was later equipped with internal combustion engines. Today, automobiles are in the process of moving away from carbon emissions with fully electric engines. Two major world wars occurred during this century, during which the automobile continued its development. While wars periodically disrupted automobile demand, the most significant advances were made during the wars, and producing cars that were affordable to the public became a policy tool for leaders. The social climate that emerged after World War II, the establishment of the US dollar as base currency, globalization, and production closer to the market increased automobile demand worldwide. Following the oil crisis, manufacturers began to move their assembly lines closer to the market, and by 1990, Turkey, benefiting from these investments, became a major assembly line in Europe. According to 2024 data, the global automotive market reached 93,546,599 units, making it the leading sector in terms of production, accounting for over 21% of the market share. The Turkish automotive market reached an all-time high of 1,238,509 units. The Turkish automotive industry, with a 13% increase, once again became the leading sector, accounting for 16% of total exports. The first part of this three-part study outlines the historical trajectory of the automobile industry. The second part aims to explain the current state of the sector through the globalization process and actual sales figures. In this context, it covers Turkey's production and export capacity, the rate of domestic production, the determinants of market demand, the effectiveness of tax policies, and the factors that determine demand. The third part, which consists of two parts, follows the transition to electric cars within the scope of future projections. The second part provides a SWOT analysis of the Turkish automotive market during the transition to electric cars and an econometric analysis based on sales figures between 2010 and 2024. Data obtained from Eviews indicates that an increase in the gross minimum wage increases automotive sales (at a significance level of 1%). An appreciation of the dollar against the Turkish Lira decreases automotive sales (at a significance level of 5%).