The main question at the basis of this research project is whether Foreign Direct Investment (FDI) occurring in the Turkish automobile industry has any effect on local suppliers, especially whether and to what extent it leads to knowledge and technology transfers towards local suppliers. Therefore, the main objective is to determine what - if any - kind of knowledge and technology transfers occur from multinational companies (MNCs) in direction of their local suppliers in the Turkish automotive industry in the field of product design and production processes. In addition, the project aims at revealing those characteristics of local suppliers that influence the occurrence of these transfers, the place of these firms in the value chain of MNCs and the effect of the aforementioned transfers on the performance of local suppliers. In the course of this analysis, the volume and nature of innovation and research and development (R&D) activities of these firms will be explored as well. The main reason for focusing on the automotive industry is the fact that the globalization process as well as technology and innovation activities of firms have been taking place now more rapidly and at a more global scale in the automotive industry than in many other industries. Other reasons are the existence of a large number of foreign firms in the Turkish automobile industry, the existence of increasing relationships between MNCs and local firms and the extensive R&D and innovation activities of firms taking place in this sector. To these must be added its growth and employment creation potential which has led this industry to become one of the most important strategic industries in the Turkey. In this research project, two different methods were used to collect detailed data and information at the firm-level. First, a detailed questionnaire survey was designed and later conducted face to face with the production and/or R&D managers of the local suppliers. Second, face to face interviews based on a semi-structured interview guide were carried out with the top level managers of the main automotive manufacturers in Turkey. The main findings are: there are knowledge and technology transfers from foreign firms to their local suppliers on co-designer and co-development activities, the designing of production tools, the development or improvement of quality and control methods, the cost reduction and the design of materials. Econometric analysis points to the fact that these transfers exert a positive effect on the performance of supplier firms.