Turkish Autos: Cyclical headwinds overshadow structural opportunities

Research evidence excerpt

Turkish Autos: Cyclical headwinds overshadow structural opportunities

28 July 2026

Turkish Autos EquitiesAutomobiles

Cyclical headwinds overshadow structural opportunities Türkiye

◆ We cut 2026 forecasts and TPs; earnings expectations reset Cenk Orcan*

across the sector Aviation & Industrials Analyst HSBC Yatirim Menkul Degerler A.S.

cenkorcan@hsbc.com.tr

◆ Model cycles and localisation remain long-term positives, but +90 212 376 46 14

earnings recovery is likely to be gradual David John*

Associate

Bangalore

◆ Retain Buy on TOASO, Hold on DOAS and TTRAK;

downgrade FROTO to Hold (from Buy) * Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

not registered/ qualified pursuant to FINRA regulations

Earnings, rather than volumes, drive our more cautious stance. We lower our

2026 Turkish light vehicle market forecast to c1.3m units (from 1.4m) following

weaker year-to-date demand, while maintaining the view that competitive pricing,

inflation and currency dynamics will continue to compress margins across the sector.

Financing conditions should only gradually improve parallel to inflation trends and

rate cuts, and we do not expect a meaningful pricing recovery in the near term.

The operating backdrop has become more differentiated across companies.

Domestic demand remains resilient by historical standards but softer than previously

expected, while exports face a mixed outlook amid only modest European demand

growth and continuing uncertainty surrounding the EU’s proposed “Made in EU”

framework. Meanwhile, electrification continues to reshape the market, although

recent tax changes have curtailed Chinese brands’ momentum and shifted demand

towards local production, established OEMs, and imports from ex-China markets.

Our preferred exposure remains Tofas.