Turkey has taken a bold step to safeguard its domestic automotive industry by imposing a 40% customs duty on imports of Chinese-made cars, including conventional and hybrid passenger vehicles, effective July 7. The Turkish government’s move is aimed at curtailing the deterioration of the country’s current account balance and stimulating local investment and production. The minimum fee per vehicle will be USD 7,000, reflecting the government’s commitment to bolstering domestic manufacturers and addressing a significant trade deficit. In response to this development, major Chinese car manufacturers, such as MG and Chery, have announced plans to accelerate their production and localization strategies in Turkey. MG has already initiated the process of signing a letter of intent for investment, while Chery is working on the feasibility of establishing production facilities in the country. This aligns with the broader global trend of shifting production away from China, as European carmakers like Volvo are also considering moving their EV production to other countries in light of anticipated EU tariffs on Chinese-made vehicles. The decision by Turkey is part of a global trend where countries are increasing tariffs on Chinese imports to protect local industries. The Turkish Ministry of Commerce emphasized that the move is crucial for reducing the current account deficit, which stood at USD 45.2 billion last year. The automotive industry, a key sector in Turkey’s economy, has welcomed the government’s decision, with expectations that the Turkish car market will continue to grow, reaching 1 million units in 2024. The new tariffs are expected to significantly impact car prices, leading to a surge in sales before the implementation date and a likely decline afterward. The second-hand car market in Turkey is also anticipated to experience a 10-15% price increase, potentially driving consumers towards used vehicles. As the global automotive industry navigates through these regulatory and market changes, the strategic realignment of production and investment is becoming increasingly evident.
Key points
- Turkey imposes a 40% customs duty on Chinese car imports, effective July 7, to protect its automotive industry.
- Chinese manufacturers MG and Chery plan to localize production in Turkey in response to the new tariffs.
- The Turkish automotive market is expected to reach 1 million units in 2024, amidst growing protectionist measures.
- The move is part of a global trend of countries increasing tariffs on Chinese imports to protect local industries.
