As a result of the on-going changes in the global economic structure, competitiveness gained significance; leading to more research on the dynamics of competitiveness. The concept of competitiveness has been developing since Adam Smith’s work in 1776. With Porter’s work, competitiveness has gained even more attention. For Porter, the only meaningful aspect of competitiveness is productivity. The principal goal of a nation is to produce a high and rising standard of living for its citizens. Determinants of competitiveness are summarized as; (1) Context for firm strategy and rivalry (2) Factor conditions (high quality of life, high levels of R&D) (3) Demand conditions (local demand) and (4) Related and supporting industries (clusters) (Porter 1990). There are a lot of studies on competitiveness through the perspective of innovativeness. Innovativeness can be described as the ability to produce new goods and services, to develop new production processes or methods of marketing and to change the organizational structure of firms. Due to sharing inputs, benefiting from labor pools and dispersing knowledge, the potential of innovativeness has increased in clusters. The purpose of this paper is to explain the relationship between innovativeness and competitiveness and to determine the factors that are influential on the competitiveness potential of the automotive industry which is clustered in Istanbul and Eastern Marmara Region Following the literature review, given in the introduction; automotive clusters in Turkey are explained in chapter two. Case study area is described in chapter three. Istanbul is the most industrial city in Turkey. Eastern Marmara Region has also important industrial provinces such as Bursa, Kocaeli and Sakarya. Basic indicators demonstrate that every province has different industrial characteristics. Chapter four is about survey and survey results. To examine the relationship between innovativeness and competitiveness, 400 survey sheets, which have been collected from the automotive firms, are used The methodology of the empirical part is based on the Principle Component Analysis (PCA) which provides the basis for the determination of the competitiveness factors. Six factors are determined by using principle component analysis. The factors are: (1) innovative strategy (YENLKST), (2) taking risk (RISK), (3) environment (CEVRE), (4) pioneer and active firm strategy (AKTIF), (5) competitiveness strategy for market (REKST) and (6) technology (TEKNO). In order to determine the relationship between innovativeness and competitiveness, regression analysis is used. The finding of the analysis indicates that innovativeness affects competitiveness positively. Another research question is whether there is a difference among sub-regions according to innovativeness or competitiveness factors of the automotive firms. In order to analyze this question, the study area has been divided into six sub-regions in accordance with the provincial borders. The sub-regions are: (1) Istanbul European Side, (2) Istanbul Asian Side, (3) Kocaeli, (4) Sakarya, (5) Bursa 1 (Only Nilüfer district) and (6) Bursa 2 (exclude Nilüfer district). Analysis of Variance (ANOVA) is used for deciding the homogeneity among sub-regions. According to the results of the analysis there are some differences among the sub-regions. Conclusions are presented in the final chapter. In order to understand the process of competitiveness for different levels (national, regional or firm level) there is a need for more research about inter sectoral linkages and flows of goods, services, commodities and labor. It is important to develop a holistic approach combining different levels of competition. The findings of this research indicate that further research is needed, focusing on the description of the related and supporting industries for the automotive sector and to evaluate these sectors according to their competitiveness and innovativeness potential. Contribution of the local economic environment is also another important complementary subject.