Turkey has 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 the bank said points to underlying weakness behind Turkey’s export growth to its largest trading partner.
TSKB said Turkey’s exports to the EU rose by $9.7 billion over 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, creating what it described as an “unprecedented divergence” between headline figures and competitiveness.
The report said the top three categories—motor vehicles, industrial machinery, and electrical machinery and equipment—accounted for 72 percent of the total increase in exports to the EU during the period.
Automotive remains Turkey’s strongest pillar in the EU market. TSKB said Turkey exported $30.11 billion in automotive products to the EU in 2025, arguing that decades of supply-chain integration under the EU–Turkey customs union have supported the sector’s resilience. However, the report warned that proposed EU industrial rules described as a “Made in Europe” framework could reshape access to incentives and procurement if Turkey is treated as a third country. It noted that President Recep Tayyip Erdoğan wrote to European Commission President Ursula von der Leyen in December about the issue, and said Turkish business groups have been lobbying EU capitals.
The steepest market-share losses were recorded in textiles and apparel, including knitted garments, non-knitted garments, and other textile articles. TSKB said these categories together accounted for nearly $13 billion in EU exports in the third quarter of 2025, but were among the areas where China’s gains were most pronounced. The report linked the shift to China’s expanding industrial capacity and to trade wars that are redirecting global trade flows.
TSKB also flagged product groups where Turkey has gained ground, citing railway vehicles, aircraft and spacecraft, and weapons and ammunition. It said Turkey’s market share in the EU for weapons and ammunition has risen above 4 percent, while cautioning that recent quarterly declines in aircraft and railway vehicles should be monitored.
In passenger cars, TSKB said Turkey’s stronger performance 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. The bank cautioned that Turkey’s gains could prove vulnerable depending on how EU rules treat vehicles assembled in Turkey and any related incentive regimes for electric vehicles, batteries, and key inputs such as steel.
The report placed the findings in a broader economic and political context, pointing to Turkey’s record $390 billion in goods and services exports as of October 2025, high inflation, a weakening lira, and stalled talks on modernizing the EU–Turkey customs union. TSKB is a state-owned development bank founded in 1950.
