By Can Öztaş
In December of last year, the Chinese carmaker SWM Motors began production in Eskişehir, with ambitious plans. Annual production of 20,000 to 25,000 vehicles was to grow substantially and the factory was eventually to serve as a base for exports to the Balkans and neighboring markets.
Before the production line could celebrate its first birthday, it stopped. There was no trade war, diplomatic rupture or geopolitical drama. SWM simply could not supply new models meeting the European Union’s (EU) vehicle-safety regulation, which Turkey applies as a matter of course. A Chinese car, built in Eskişehir, was retired by Brussels.
In 2024, BYD, the Chinese electric-vehicle giant, announced a $1 billion investment in Turkey, including a factory capable of producing 150,000 cars a year. Two years later, Ankara insisted the agreement remains legally valid. BYD’s executive vice-president said the Turkish project has no timeline. Both statements can be true at once, which is the peculiar genius of investment agreements.
Turkey already has a substantial automotive industry and privileged access to European markets. Chinese manufacturers appeared to offer the missing ingredients of the electric-vehicle age: capital, technology and extraordinary scale.
China would invest. Turkey would manufacture. Europe would buy.
It was an elegant formula, perhaps a little too elegant.
WHAT COUNTS AS MADE HERE?
Turkey has spent the past few years trying to change the terms of its relationship with Chinese carmakers. Imports were made more difficult while investment was encouraged. The message was straightforward: if Chinese companies wanted the Turkish market, building cars here would make more sense than shipping them in.
China took this policy to the World Trade Organization and, this summer, prevailed on important points: a panel found that the extra duties breached Turkey’s commitments. Ankara used tariffs to persuade Beijing to invest, and Beijing used free-trade rules to persuade Ankara to stop.
Tariffs, in any case, can only move an assembly line. Electric vehicles have shifted much of the competitive advantage towards batteries, software, electronics and platforms, precisely where China has become exceptionally strong. Turkey wants more than factories from Chinese companies. It wants access to an industrial transformation already under way elsewhere.
Togg makes the point visible. It is produced in Turkey and presented as a national industrial project. Its battery company, Siro, is a joint venture with China’s Farasis. The national car, in other words, runs on a joint venture. This is tradition, not scandal: the domestic petrol and diesel car industry grew the same way.
How much has to happen in Turkey before “Made in Türkiye” describes an industrial capacity rather than simply a production location? That question becomes more complicated when we look west.
INSIDE THE WALLS
The EU is developing industrial policies centred on economic security, strategic technologies and European production.
In March, Ankara won a quiet victory: the Commission’s draft Industrial Accelerator Act counted Turkish production, through the Customs Union, as European for the purpose of its “Made in EU” rules. Trade Minister Ömer Bolat declared Turkey “an inseparable and reliable part of European value chains”. By June, he was complaining that the same law took “a protectionist approach”. The minister was not contradicting himself. Turkey wants to be inside Europe’s walls and to keep the gates open.
After three decades of the Customs Union, Ankara’s case amounts to a different formulation: not “Made in Europe”, but “Made with Europe”. It is an unusually accurate description of Turkey’s economic position. For decades, the country remained politically outside the European Union while becoming deeply embedded in its manufacturing economy. Accession talks froze. The assembly lines did not.
Now Turkey is asking China for a similar relationship. Selling in Turkey is welcome; the greater prize is convincing Chinese companies to produce here, invest here and perhaps use Turkey as a platform for markets beyond it.
In other words, Turkey wants to remain “Made with Europe” while also asking China to make it with Turkey. It is proposing a ménage à trois to two partners who are trying hard not to be in the same room. Europe wants to reduce strategic dependence on China. Chinese manufacturers are looking for ways to produce closer to European consumers.
Diplomacy has long worked the same way: an EU candidate that is also a dialogue partner of the Shanghai Cooperation Organization. Foreign policy can keep several doors open. A production line eventually has to know where those doors lead.
Turkish foreign policy could afford a degree of ambiguity because Turkish industry had considerably less of it.
For most of the twentieth century, “Made in” offered a reasonably simple answer about where something came from. Today the battery may be Chinese, the factory Turkish and the customer German. But for Turkey, the rules are still written in Brussels.
