The work, in front of the German Chancellery, featured a banner with the faces of Erdogan, Russian leader Vladimir Putin and Saudi Arabia's King Salman bin Abdulaziz next to a sporty-looking black Mercedes, with the words "Do you want this car? Kill dictatorship."
It was staged Monday afternoon by an activist art collective, the Center for Political Beauty, known for its provocative -- but peaceful -- "interventions" on humanitarian themes.
Turkey's Foreign Ministry condemned what it said was "a new example of rising racism and xenophobia in the country" and urged Germany to take "all necessary measures" over the incident.
"The wording on the banner is a direct call for violence targeting the lives of the leaders whose photos are depicted on it," a Turkish Foreign Ministry statement said. "The fact that the German Police did not intervene in the matter despite their presence at the venue makes this incident even more grave."
The row comes at a time of strained relations
between Turkey and Germany. German Chancellor Angela Merkel in March questioned Turkey's commitment to democracy and the rule of law, while Erdogan suggested Germany's Nazi past might not be entirely behind it
Asked about the Berlin incident at a government press conference on Wednesday, German Foreign Ministry spokesman Rainer Breul said: "We have received a protest note from the Turkish Embassy that expressed anger about this particular action."
Philipp Ruch, artistic director for the Center for Political Beauty, told CNN the art installation had been staged to coincide with this week's G20 summit in Hamburg.
"The message that we want to give is (that) dictatorship is not welcome in Germany," he said. "We have a big past with autocracy and totalitarianism and we absolutely know from our own history that it shouldn't be tolerated."
Freedom of expression
Ruch highlighted concerns over the treatment of journalists
and opposition activists in Turkey, many of whom have been imprisoned following a crackdown by the authorities in the wake of last year's attempted coup. The provocative message on the banner is meant to inspire debate, he said.
Ruch said the German authorities had not responded to the Turkish government's request for action against the group, adding that post-war Germany had a strong tradition of freedom of expression.
"This is a democracy and a state with the rule of law, and this is what I really love about our country as an artist," he said.
The Center for Political Beauty also staged a leaflet drop Friday in Istanbul's Gezi Park as an act of "resistance," Ruch said. The text of the leaflet, written in Turkish by Turks living in Germany, was the result of a competition staged by the collective.
It urged readers to resist Erdogan's government, saying "Defend the democracy. Fight against racism. Bring the dictatorship down."