Automotive Supply Industry Strengthens Against Global Risks Through Digital Transformation

Rising geopolitical risks, inflation-exchange rate imbalances, elevated financing costs and disruptions in global supply chains are intensifying cost pressures in the automotive supply industry daily. Energy, logistics, freight and petrochemical-driven cost increases rank among the key factors straining the sector's competitiveness, while the automotive supply industry is adapting to this challenging period through productivity improvements, digital transformation and automation investments.

Yakup Birinci, Chairman of the Board of TAYSAD, the roof organization of Turkey's automotive supply industry, drew attention to the strategic importance of the supply industry in automotive exports, stating: "Approximately half of automotive exports are realized by the supply industry. While the supply industry's share in a vehicle's cost structure stands at around 60 percent, this ratio rises to 70 percent when domestic content in vehicles produced in Turkey is considered. This picture demonstrates how critical a position the supply industry holds for Turkey's economy and exports."

Rising geopolitical tensions and economic fluctuations in the global economy are bringing a search for new balance in production-focused sectors. With its multi-layered structure and high level of global integration, the automotive supply industry stands out as one of the sectors most affected by and directing this transformation.

250,000-Person Workforce
Noting that TAYSAD represents approximately 250,000 employees with more than 540 member companies today, Yakup Birinci said the sector is not merely a parts manufacturer but also one of the pillar columns carrying Turkey's export power.

Birinci stated: "A significant portion of a vehicle's total value is created by the supply industry. Considering the domestic content ratio, our sector directly contributes to Turkey's competitive strength in foreign markets. For this reason, the automotive supply industry is one of the strategic actors in our country's export economy."

Turkey Positioned as Europe's Production Hub
Emphasizing that Turkey possesses strong production infrastructure in the automotive supply industry, Birinci said there is approximately 1.5 million units under guarantee production capacity alongside approximately 2.5 million units of production capacity.

Drawing attention to approximately 70 percent of the sector's exports being realized to European Union countries, Birinci noted:

"Supply industry facilities in Turkey have become an important part of global automotive production networks, particularly in Europe. Our balanced trade structure with approximately EUR 5 billion in exports and EUR 5 billion in imports demonstrates how strongly Turkey is integrated into the European automotive ecosystem."

Inflation and Exchange Rate Imbalance Complicates Competition
Identifying the mismatch between inflation and exchange rates as one of the fundamental problems facing the sector, Birinci stated that while inflation reached 14 percent over the last four-month period, the increase in the euro exchange rate remained at 4.6-4.8 percent levels, creating serious pressure on exporting manufacturers.

Noting that rising interest rates are making access to financing more difficult, Birinci said cost increases stemming from logistics, freight, oil and petrochemicals are also pushing up production costs.

Electric Vehicle Transformation Launches a New Era
Emphasizing that technological transformation in the automotive sector is reshaping the supply industry, Birinci noted that electronic components, software and next-generation technologies are gaining importance particularly with the proliferation of electric vehicles.

Stating that "productivity improvements, digitalization, automation investments and adaptation to new technologies have now become fundamental elements of competitiveness," Birinci concluded his remarks as follows:

"With the electric vehicle transformation, our sector is redefining itself. New technologies, new partnerships and high value-added production models are coming to the fore. As TAYSAD, we are continuing our efforts to make our sector more resilient, more flexible and more competitive against global risks."