, a finding that the bank said shows weakness behind Turkey’s export growth to its largest trading partner.){kind=link}
Turkey lost market share to China in 44 of 97 product categories exported to the European Union over the past year, according to an analysis by Turkey’s Industrial Development Bank (TSKB), a finding that the bank said shows weakness behind Turkey’s export growth to its largest trading partner.
The TSKB said Turkey’s EU exports rose by $9.7 billion in the past 12 months, but 59 percent of that increase, $5.7 billion, came from automotive products. The bank said the 44 product groups where Turkey is losing ground to China account for more than 35 percent of Turkey’s exports to the EU and create what it called an “unprecedented divergence” between headline figures and competitiveness.
The top 3 categories — motor vehicles, industrial machinery and electrical machinery and equipment — accounted for 72 percent of the increase in exports to the EU over the period, the report said.
Turkey exported $30.11 billion in automotive products to the EU in 2025, the TSKB said, adding that decades of supply chain integration under the EU-Turkey customs union has helped the sector. But the report warned that proposed EU industrial rules described as a “Made in Europe” framework could change access to incentives and procurement if Turkey is treated as a third country. It noted that President Recep Tayyip Erdoğa wrote to European Commission President Ursula von der Leyen in December on the issue and said Turkish business groups have lobbied EU capitals.
The TSKB said the steepest market share losses were in textiles and apparel, including knitted garments, non-knitted garments and other textile articles, which together accounted for nearly $13 billion in EU exports in the third quarter of 2025. The report said the shifts reflect China’s expanding industrial capacity and trade wars that are redirecting trade flows.
The bank highlighted gains in railway vehicles, aircraft and spacecraft, and weapons and ammunition. It said Turkey’s market share in the EU for weapons and ammunition rose above 4 percent but warned that recent quarterly declines in aircraft and railway vehicles should be monitored.
On passenger cars, the report said Turkey’s gains in the EU market coincided with a decline in China’s shipments after the EU imposed tariffs of up to 45 percent on Chinese-made electric vehicles in October 2024. It said Turkey’s gains could be vulnerable depending on how the EU rules treat vehicles assembled in Turkey and related incentives for electric vehicles, batteries and inputs such as steel.
The TSKB also placed the findings in a wider economic and political context, noting Turkey’s record $390 billion in goods and services exports as of October 2025, high inflation and a weakening lira and stalled talks to modernize the customs union. The TSKB is a state owned development bank founded in 1950.