The industrialization of the automotive sector in Turkey began in the early 1960’s. Turkey’s geographic proximity with Europe and Asia, its production costs being lower in comparison to that of other European Union countries, and lower export tax due to the tax agreement signed with the European Union are among the important factors that played a big role in the development of the automotive sector in Turkey. This sector offers many incentives including tax exemption facilities.

In this globally competitive sector, the Turkish automotive industry, by producing more than 1 million vehicles in the global level, has risen to number 17 in the world ranking.

(Association of International Motor Vehicle Manufacturers -2008)

Excise Duty and VAT being about 60% to 100% of the pre-tax price and the high rates of taxes on fuel are among the biggest problems experienced in the automotive industry in Turkey.

Among the primary objectives of the Turkish automotive industry is to produce about 4 million vehicles until the beginning of 2020’s, to realize the export forecast which is above 60 billion $ and to actualize the millions of dollars worth of investments on Research and Development and Product Development studies.