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Automotive Ekports January 2025

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Monthly automotive aftermarket magazine

GROUP CHAIRMAN

H. FERRUH ISIK

PUBLISHER:

İstmag Magazin Gazetecilik

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Managing Editor (Responsible)

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+90 505 577 36 42

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Dynamism of the automotive exports

As known, the autoparts industry of Türkiye has developed rapidly in line with the

automotive industry. The Turkish autoparts industry with its large capacity, wide

variety of production and high standards, supports automotive industry production

and the vehicles in Türkiye and also has ample potential for additional exports.

Whereas previous manufacturing activity focused on domestic markets only,

production now extends to export markets. As a result of this structural change,

the competitiveness at the domestic level is now replaced with competitiveness

on a global scale, both in terms manufacturers and suppliers. Fluctuations in

production resulting from global economic crises have given way to stable

production patterns. In addition, the consumer satisfaction standard based

on domestic market demands has now become a quality standard satisfying

customers worldwide.

Following the shift of the focus on customers, markets, products and competition

from the local level to the global level, Turkish manufacturers and suppliers now

position themselves globally rather than locally.

This transformation in the sector urges automotive suppliers to improve their

existing structures in line with the demands of global auto manufacturers.

These improvements relate to a need to build advanced technological skills,

infrastructure, research and development means; capable of effective and

successful technical cooperation; skilled in unique product development;

equipped with the ability to obtain shares in global projects as well as to have high

brand competitiveness.

Actually, auto manufacturers increasingly choose Türkiye as a production base

for their export sales. This is evidenced by the fact that 73 percent of vehicle

production in Türkiye was destined for international markets.

We think that technology and competitive power will always be the two keys for

the survival of the automotive industry. Dynamism and innovation have turned out

to be the rules of the game in the automotive industry as usual.

Our publications remain at the service of those business people seeking to

increase their share in the increasingly competitive automotive market. They are

ready to upgrade their export volume further.

We wish them and their trading partners a fruitful business

automotiveexport

EDİToR

automotiveexports



Electric vehicles estimated to make up

30% of Turkish auto market in 2025

January 2025

Electric vehicles (EVs) are estimated to make up 30%

of Türkiye’s auto market in 2025, as increasingly more

EV models of well-known car brands enter the country

and the domestic EV brand Togg boosts its production

capacity, Ali Bilaloglu, CEO of the Turkish auto exporter

and distributor Dogus Otomotiv, told Anadolu.

Bilaloglu stated EV and hybrid sales accounted for

27% of the total Turkish auto market this year, led by

the entry of Chinese brands into the market.

“This year, we launched at least one EV model for

almost every brand we distribute, representing all

Volkswagen Group brands, and two or three more EV

models for most of our brands,” he said, noting that

the number of EV models the firm distributes from the

group will be 20-25 in the coming years.

Bilaloglu estimated that the end-year auto sales,

excluding heavy commercial vehicles, will reach 1.2

million units this year, as January-November sales

totaled near 1.1 million units, close to the record sales

of 2023.

He stated that the Turkish auto sector develops

every year and the country’s demographic structure

influences the market.

Bilaloglu said that the duration extension of EU General

Safety Regulation (GSR) II, the increase of the number

limit of vehicles sold without the special consumption

tax (SCT), and the speculations that the SCT would

increase led to the high number of sales this year.

“Like other developed and industrialized countries with

large economies like that of Türkiye’s, we observe that

tax policies to ensure predictability of the market are

more stable and do not change during the year,” he

noted.

Bilaloglu stated that the turbulent and the complicated

period the world is in may lead to price hikes in the

auto market, while high interest rates may deter

investors.

4



Auto sales surpass 1 million units

in January-November

Türkiye’s auto market contracted by 0.5 percent

annually in January-November with 1.07 million

passenger cars and light commercial vehicles sold.

Passenger car sales increased by 0.5 percent

year-on-year to 845,530 units, while the sales of

light commercial vehicles declined 4.4 percent to

222,730 units, according to data from the Automotive

Distributors’ and Mobility Association (ODMD).

Last year, 1.23 million vehicles were sold in Türkiye,

surging more than 57 percent from 2022.

In November alone, 121,094 vehicles were sold,

pointing to a 5.3 percent year-on-year increase. On an

annual basis, the auto market contracted 9.4 percent

in September and 4 percent in October. Passenger car

sales exhibited an annual increase of 3.5 percent to

94,595 units. Light commercial vehicle sales rose by

12.2 percent to 26,499.

Last month, Türkiye’s EV market expanded by 20.8

percent from a year ago with EV sales at 13,554 units,

accounting for 14.3 percent of all vehicle sales.

In the first 11 months of 2024, EV sales in the country

surged 38.6 percent year-on-year to 83,298.

Domestic brand Togg was the market leader in the EV

market, delivering 24,361 vehicles, while U.S. electric

carmaker Tesla sold 9,227 units in Türkiye in January-

November.

January 2025

6



BYD target of 4M, outpace Ford, Honda

China’s top electric vehicle producer, BYD, gained

market share as the world’s largest auto market

recorded its fastest-growing month in 2024, setting the

company up to surpass its global annual sales goal

of 4 million units and overtake sector giants Ford and

Honda. BYD has been on an extraordinary expansion

this year, growing capacity and undertaking a massive

hiring spree to turbocharge revenue that surpassed EV

leader Tesla in the third quarter.

Aided by robust sales in China, BYD is on course to

top its annual sales target of 4 million vehicles, which

would put it ahead of Japan’s Honda and Detroitbased

Ford for 2024.

The Chinese electric vehicle giant delivered 3.76 million

vehicles in the first 11 months this year, including

506,804 units sold in November.

Bolstered by strong sales led by a competitive lineup

of models with its latest plug-in hybrid technology,

BYD gained ground over rivals as China’s car sales

grew in November at their fastest from a year earlier

since January, thanks to government-subsidized auto

trade-ins. The number of subsidized car trade-ins

totaled more than 4 million as of Nov. 18, according to

official data. Without such trade-ins, year-to-date car

sales may have contracted versus a 4.4% increase for

the January-November period, according to Reuters

analysis based on industry numbers.

As of last month, BYD’s share of the Chinese auto

market, which makes up more than 90% of its total

sales, stood at 17.1%, up from 12.5% in 2023,

according to data from the China Passenger Car

Association (CPCA).

In comparison, Volkswagen’s two joint ventures with

SAIC and FAW Group took a combined 11% market

share in the January-November period, compared with

14.2% last year.

If that sales momentum continues, BYD could sell

more than 6 million units in the next 12 months,

which would put it on par with the world’s leading

automaker groups such as General Motors and

Stellantis, according to Reuters estimates based on the

automakers’ existing sales.

The Chinese firm aims to deliver 5 million to 6 million

cars in 2025, Citi analysts said in a recent note after a

meeting with the automaker’s management.

BYD did not respond to a request for comment.

From August to October, the automaker added nearly

200,000 units in production capacity and hired 200,000

workers for auto and parts manufacturing, an executive

said in November.

The total number of BYD employees was close to 1

million as of September, up from around 703,500 at the

end of 2023.

Its efforts to boost scale have helped it outpace

rivals in growth, better control costs and win a brutal

price war in China that has squeezed many foreign

automakers. BYD has also asked dozens of its

suppliers for price cuts, according to a recent stateowned

media report.

In the latest sign of foreign carmakers’ deepening woes

in China, General Motors said it would take more than

$5 billion in charges on its China operation due to

restructuring and the declining value of its joint venture,

which has suffered losses and decreasing sales.

January 2025

8



Škoda and Parkopedia enhance valued

in-car payment service

January 2025

Helpful live notifications on Škoda infotainment

systems inform drivers when in-car parking and fuelling

payment functionality is available at a location

New in-car payments service is available launching

with fuel-powered Škoda models produced from Q2

2024 across Europe plus the Škoda Enyaq and the

upcoming all-electric Škoda Elroq with further EVs to

follow1

Parkopedia provides parking data and in-car payment

platform functionality for Škoda drivers

December 2024 - London, UK / Mlada Boleslav, Czech

Republic

Parkopedia and Škoda have updated notifications on

their in-car payment service to now include helpful

prompts to inform drivers when they are approaching

locations that support in-car payment transactions,

building upon the existing collaboration that currently

provides convenient in-car payments for parking and

fuelling.

This ‘nudging’ functionality enables drivers to

easily locate parking and fuelling sites, with useful

notifications now appearing on their vehicles’

infotainment screens to inform them of locations

where they can complete transactions, as part of

an enhanced connected driver experience. The

functionality is made possible thanks to Parkopedia’s

extensive and granular parking data with the quality

and accuracy of location data being a fundamental

part of enabling successful in-car transactions. This

new functionality is launched with fuel-powered Škoda

models, produced from Q2 2024 including the Fabia,

Kamiq, Karoq, Kodiaq, Octavia, Scala and Superb,

with notifications for parking locations being added to

the the upcoming all-electric Škoda Elroq at launch,

with the Enyaq and additional EV models gaining this

functionality in 2025.

The service takes the stress out of finding parking

machines, minimises driver distractions with subtle

prompts and bypasses additional issues such as

out-of-order machines, not having the correct change,

card payment issues and more. In-car payments are

a growing priority for drivers worldwide, with 59%

of European drivers wanting the option to pay for

parking through their in-car media system, according

to the latest Parkopedia Global Driver Survey figures.

This survey also highlighted that parking is the most

requested in-car payment service for drivers, reflecting

that paying for services with outdated methods can

be an unnecessarily stressful and time-consuming

process that detracts from the driving experience.

Highlighting the value of this new functionality, Markus

Dohl, VP of Sales & Business Development Europe

at Parkopedia, said: “New cars are now packed with

a host of useful features, so it can be difficult for

drivers to find the connected services they want while

focusing on driving. Our new feature developed with

Škoda, simplifies the payment process, intelligently

informing drivers when convenient in-car payment

services are available in their surrounding area or

at their destination with onscreen notifications and

prompts. This ensures that drivers can easily access

Škoda’s valued connected services, bolstering its

strong brand satisfaction and customer loyalty.”

Referring to the partnership, Škoda Technical Project

Lead & Product Manager, Martin Handl, added: “Škoda

is proud to offer a range of user-friendly features that

take the stress out of drivers’ everyday lives and our

latest feature with Parkopedia offers the same value,

enabling drivers to get the most from their Škoda

whenever they need to make vehicle-based purchases

behind the wheel. From our driver feedback, we know

that paying for parking and fuel can be a tedious

and stressful task for our drivers, which is why we’ve

worked with Parkopedia to streamline this process for

our drivers with this innovative and valuable solution.”

10







Turkish auto market expected

to top 1M sales again in 2025

January 2025

The Turkish auto market is expected to exceed 1

million units in sales next year thanks to the country’s

monetary easing efforts and lowering inflation, Berk

Cağdaş, the CEO of Turkish-based car dealer MAIS

Istanbul Renault, told.

Auto market demand rose in the first quarter of the

year, he said, and a high number of sales were made

despite the tight monetary policy and uncertainty in

exchange rates after the local elections in March,

worrying potential buyers and distributors.

Still, sales remained relatively robust in general

throughout the year and they already surpassed 1

million units before year-end, following also strong

demand in 2023.

The market expected a contraction in April due to

an increase in credit costs, restrictions and difficulty

getting credit after the elections, and sales started to

decline.

He said the news that vehicles that do not comply with

the EU General Safety Regulation II can no longer be

registered prompted brands to deplete their stocks,

while credit applications were reduced and prices fell

significantly, adding that vehicles cost much lower than

their supposed prices.

“The number of total sector sales totaled

approximately 1.1 million units, 0.5% below last year’s

figures, as of end-November, and last year, there was

a lack of vehicles and all stocks were sold quickly, and

this year, there was an abundance of vehicle stocks

but with the lowered prices due to the GRS, the prices

were reduced significantly to almost get rid of the

stocks,” he said.

Cağdaş said the Turkish auto sector could reach

around and even exceed 1.2 million units sold by the

end of this year, estimating 150,000 units sold for

December.

Türkiye has significant potential in the auto sector due

to high urbanization compared to other Organisation

for Economic Co-operation and Development (OECD)

countries, he said.

16


“There are 177 vehicles for every 1,000 people

in Türkiye, versus around 570 per 1,000 in EU

countries,” he said.

Cağdaş stressed that falling inflation, lower

interest rates, economic stability and a stable

exchange rate have been major factors, as

more and more customers spend their hardearned

disposable income on automobiles,

estimating that auto sales next year would be

no less than 1 million units.

Türkiye can attain a leadership position in the

global auto market in production but China’s

competition is an important factor, he said, as

its advantages “can’t be matched globally in

terms of cost.”

“If we look at their advantage, a high production

potential can’t be limited to domestic territories,

as China exports its autos and uses all sorts of

methods to attract consumers in the markets

they enter, but countries are taking measures

to slow down China’s efforts with tariffs and

restrictions, but their efforts are for the shortterm,”

he said.

He mentioned that Türkiye’s high-quality

products are exported to nearly 40 countries,

adding that four models of the Dacia Duster,

an SUV produced by Renault subsidiary Dacia,

will be manufactured in Türkiye in 2027, with an

investment of over $400 million.

January 2025

17






Investments in battery sector

in Türkiye exceed $1B in 2024

January 2025

Türkiye has introduced incentives and regulations to

achieve a storage target of 80 gigawatt-hours (GWh)

by 2030, while the energy sector’s agreements to

establish cell and battery factories have exceeded $1

billion (TL 35 billion) this year, according to a head of

a local association involved in the battery sector on

Monday. Energy storage systems, emerging as new

players in installed capacity, and the accompanying

battery sector are attracting increasing investments

and interest globally. Currently, Türkiye hosts two cell

production facilities and nearly 100 lithium-ion battery

production facilities of various scales that are actively

operating. Aiming to establish 80 gigawatt-hours of

capacity by 2030, the country aspires to become a

regional hub for production and investment in battery

technologies.

In July, the government announced the “HIT-30”

investment program, which offers comprehensive

support and incentives for special projects in highpriority

technology areas and develops tailored

solutions to specific needs.

Following the program’s announcement, the battery

sector experienced significant momentum, with

domestic and international companies signing new

agreements. Kadem Usta, president of the Association

of Battery Manufacturers and Suppliers (PILDER),

evaluated the recent developments in the battery

sector over the year in an interview with Anadolu

Agency. Usta stated that 2024 witnessed critical

advancements, both in the global and Turkish battery

sectors.

“Globally, steps to integrate renewable energy sources

and recycling have come to the forefront, while in

Türkiye, HIT-30 incentives and investment projects

have been the main drivers supporting the sector,”

Usta said.

“Within the scope of the HIT-30 incentives, significant

support for battery production and energy storage

systems has been announced. These incentives have

accelerated investments in the sector,” he added.

Moreover, he highlighted that six agreements signed

this year between domestic and foreign firms would

establish new factories with cell and battery production

capacities of up to 5 gigawatt-hours in cities such as

Ankara, Kocaeli, Istanbul and Izmir.

“The agreements signed this year have exceeded $1

billion in value. With six new investments nationwide,

the total number of battery production facilities will

increase to 11,” he said.

Pointing out that the legal infrastructure for the

operation of battery and energy storage power plants

has not yet fully taken shape, Usta noted that a draft

regulation has been published, but the first approvals

are expected in 2025. He noted that high interest rates

had adversely affected investment decisions during the

year but noted that steps had been taken to achieve

long-term investment goals.

In addition, Usta stated that Türkiye’s battery imports

are expected to remain at the same level as in 2023,

amounting to approximately $1.1 billion. In contrast,

battery export volumes are expected to rise from

$39 million to $48 million by the end of the year,

marking a significant increase. He also recalled that

the 2024 Battery Technologies Summit, organized by

PILDER, brought together domestic and international

companies, calling the event “highly productive.”

“Global battery companies also participated in

the summit, creating opportunities for information

sharing and inter-company collaborations. The highly

productive summit further strengthened Türkiye’s

position in the battery sector,” he noted.

Touching on the sector’s expectations for the coming

year, Usta said: “From 2025 onward, more companies,

both domestic and international, are expected to join

the sector through partnerships. These developments

demonstrate the significant potential for enhancing

Türkiye’s energy independence and competitiveness in

the global market.”

He also announced that PILDER would organize the

Battery Technology Summit in October 2025 at Gebze

IT Valley, inviting everyone interested in keeping pace

with the battery sector’s developments to attend.

22



BYD on course to top 2024 sales

target of 4M, outpace Ford, Honda

January 2025

China’s top electric vehicle producer, BYD, gained

market share as the world’s largest auto market

recorded its fastest-growing month in 2024, setting the

company up to surpass its global annual sales goal

of 4 million units and overtake sector giants Ford and

Honda. BYD has been on an extraordinary expansion

this year, growing capacity and undertaking a massive

hiring spree to turbocharge revenue that surpassed EV

leader Tesla in the third quarter.

Aided by robust sales in China, BYD is on course to

top its annual sales target of 4 million vehicles, which

would put it ahead of Japan’s Honda and Detroitbased

Ford for 2024.

The Chinese electric vehicle giant delivered 3.76 million

vehicles in the first 11 months this year, including

506,804 units sold in November.

Bolstered by strong sales led by a competitive lineup

of models with its latest plug-in hybrid technology,

BYD gained ground over rivals as China’s car sales

grew in November at their fastest from a year earlier

since January, thanks to government-subsidized auto

trade-ins. The number of subsidized car trade-ins

totaled more than 4 million as of Nov. 18, according to

official data. Without such trade-ins, year-to-date car

sales may have contracted versus a 4.4% increase for

the January-November period, according to Reuters

analysis based on industry numbers.

As of last month, BYD’s share of the Chinese auto

market, which makes up more than 90% of its total

sales, stood at 17.1%, up from 12.5% in 2023,

according to data from the China Passenger Car

Association (CPCA).

In comparison, Volkswagen’s two joint ventures with

SAIC and FAW Group took a combined 11% market

share in the January-November period, compared with

14.2% last year.

If that sales momentum continues, BYD could sell

more than 6 million units in the next 12 months,

which would put it on par with the world’s leading

automaker groups such as General Motors and

Stellantis, according to Reuters estimates based on the

automakers’ existing sales.

The Chinese firm aims to deliver 5 million to 6 million

cars in 2025, Citi analysts said in a recent note after a

meeting with the automaker’s management.

BYD did not respond to a request for comment.

From August to October, the automaker added nearly

200,000 units in production capacity and hired 200,000

workers for auto and parts manufacturing, an executive

said in November.

24



Northvolt crisis deals blow to

Europe’s EV battery ambitions

January 2025

The financial collapse of Swedish electric battery

maker Northvolt dealt a blow to Europe’s plan to set

up its own industry to power electric cars, stirring a

debate about whether it needs to do more to attract

investment as startups struggle to keep up with

Chinese rivals. Europe’s biggest hope for an electric

vehicle battery champion filed for U.S. Chapter 11

bankruptcy protection on Thursday after talks with

investors and creditors including Volkswagen and

Goldman Sachs for funding failed.

The Swedish company, whose motto is “Make oil

history,” has received more than $10 billion in equity,

debt and public financing since its 2016 start-up.

Volkswagen and Goldman Sachs each own about onefifth

of its shares.

Northvolt said it needed $1.0 billion-$1.2 billion in new

funds under the restructuring process, which it hopes

will end by the end of March.

In recent months, it has shrunk the business and

cut jobs in a bid to shore up its finances. But it has

struggled to produce sufficient volumes of high-quality

batteries and lost a 2 billion euro ($2.1 billion) contract

from BMW in June.

That has left Europe’s ambitions to build its own

battery industry looking a distant dream.

In recent years, Northvolt led a wave of European

startups investing tens of billions of dollars to serve the

continent’s automakers as they switch from internal

combustion engines to electric vehicles.

But growth in EV demand is moving at a slower pace

than many in the industry projected, and China has

taken a huge lead in powering EVs, controlling 85%

of global battery cell production, International Energy

Agency (IEA) data shows.

Making batteries and cells, the units that store and

convert chemical energy into electricity, is a delicate

process and doing so at scale is a challenge for any

battery maker. Northvolt has missed some in-house

targets and curtailed production at its battery cells

plant in northern Sweden, underscoring the difficulties,

Reuters reported.

“The biggest issue is that batteries are not easy to

make and Northvolt haven’t satisfied the supply

demands of their customers – that is a management

issue,” said Andy Palmer, founder of consultancy

Palmer Automotive said.

26



January 2025

“The Chinese are technologically 10 years ahead of the

West in batteries. That’s a fact,” he said.

At least eight companies have postponed or

abandoned EV battery projects in Europe this year,

including China’s Svolt and joint venture ACC, led by

Stellantis and Mercedes-Benz.

In 2024, Europe’s battery pipeline capacity out to 2030

has fallen by 176 gigawatt-hours (GWh), according

to data firm Benchmark Minerals. That’s equivalent

to almost all the current installed capacity in Europe,

according to Reuters calculations.

Some executives say Europe should do more to

attract and support home-grown projects so they can

compete with Chinese rivals such as CATL and BYD.

“Europe needs to rethink how it supports a nascent

sector before China eats up the entire value chain,

which is due to smart planning,” said James Frith,

European head of Volta Energy Technologies, which

specializes in battery and energy storage technology.

Among its $5.8 billion in debts, Northvolt owes the

European Investment Bank (EIB) some $313 million.

EIB vice president Thomas Ostros said it had been

a constructive partner to Northvolt, but it needed to

safeguard the EIB and EU’s interests.

“It remains the case that Europe has a strategic interest

in a European battery industry for electric cars and we

will follow developments very closely.

But it is much too early to say what the outcome will

be,” he said. The Swedish government has repeatedly

said it does not plan to take a stake in Northvolt.

Northvolt’s outgoing CEO and co-founder Peter

Carlsson said he was a “little worried” Europe is giving

up on its dream of competing with China.

He said Europe would regret it in 20 years time if it

retreated.

“It’s not a straight journey and right now, we’re all in

a bit of a down in that journey where there’s more

hesitations, there’s more questions on the speed of the

transition from the carmakers, from policymakers, from

the investor community,” he told reporters in a call.

28



Türkiye leads Europe in electric

vehicle fast-charging network

January 2025

Türkiye currently ranks first in Europe in terms of

socket power and the number of fast (DC) sockets per

electric vehicle, according to Mustafa Yılmaz, president

of the Energy Market Regulatory Authority (EPDK).

The number of electric vehicles (EVs) has increased

from 6,000 to 154,000 in the last two years, while the

number of charging sockets has risen from only 3,000

to 26,000, according to Yılmaz.

One-third of the charging network consists of DC fast

sockets, he said.

“In our country, there is approximately one charging

socket for every six electric vehicles, while the EU

average is 13,” Yılmaz furthered.

About half of the stations are “green charging

stations”, according to the EPDK head. He explained

that three-quarters of the electricity consumed for

charging EVs is sourced from renewable energy. The

authority has rolled out regulations designed to ensure

that EVs are powered solely by renewable energy in

line with Türkiye’s target of achieving net zero by 2025,

Yılmaz said. While only five companies were providing

charging services in April 2022, the number of such

licensed companies rose to 169, he added.

The EPDK terminated the licenses of 30 charging

companies that failed to fulfill their obligations, Yılmaz

informed. They foresee the number of electric vehicles

in Türkiye reaching 1.3 million and the number of

charging points reaching 142,000 by 2030, according

to Yılmaz. By 2035, they expect the number of electric

vehicles to increase to 3.3 million and the number of

charging points to reach 273,000, he also said.

Türkiye’s EV market has been expanding fast in the last

couple of years as the sales numbers reflect.

EV sales surged 39 percent year-on-year to 83,298

units in January-November, the latest data from the

Automotive Distributors’ and Mobility Association

(ODMD) showed. EVs accounted for 9.9 percent of

the market in the first 11 months of 2024, up from 7.1

percent in the same period last year.

In November alone, 13,554 EVs were sold, pointing

to a 20.8 percent annual increase and a market share

of 14.3 percent. Türkiye aims rapidly to reach an

annual production capacity of at least 1 million electric

vehicles, Industry and Technology Minister Mehmet

Fatih Kacır told parliament.

“The government’s commitment to electric cars and

new technologies paved the way for many global

brands such as Ford, Toyota and Renault to move their

new generation vehicle production to Türkiye,” the

minister noted.

30



Türkiye says talks with Chery for

plant investment nearing completion

January 2025

Türkiye is nearing completion in negotiations with

Chinese automaker Chery for a manufacturing facility

within the country, according to a senior official.

That would mark a second investment in Türkiye

by a Chinese carmaker after BYD earlier this year

announced it would build a plant in western Manisa

province.

“We are close to finalizing the deal,” Industry and

Technology Minister Mehmet Fatih Kacır told an

interview with business daily Ekonomi on Sunday.

Chery has swiftly risen to become one of Türkiye’s

top-selling car brands since reentering the market

last year. Reports have suggested it plans to establish

a manufacturing base in the Black Sea province of

Samsun.

In July, Ankara said BYD agreed to build a $1 billion

production plant with an annual capacity of 150,000

vehicles.

BYD’s electric and rechargeable hybrid car production

facility, which is planned to start production at the end

of 2026, is envisaged to employ up to 5,000 people

directly.

Alongside Chery, Türkiye has also been in talks with

state-owned SAIC Motor, which owns MG Motor.

BYD has already completed the environmental impact

assessment process and is moving quickly to begin

construction, said Kacır.

He drew comparisons to similar projects in China

and other countries, which he says typically reach

production readiness within 12 to 15 months.

Kacır, meanwhile, emphasized the significance of

securing such investments but also safeguarding the

interests of domestic automakers.

32


“We are proceeding cautiously, taking into account

market conditions and the interests of existing

producers,” Kacır said.

Türkiye’s robust automotive industry currently

produces nearly 1.4 million vehicles annually. It exports

nearly 1 million units, and shipments are estimated to

exceed $36 billion this year, according to Kacır.

“It is crucial not to lose this capability,” the minister

said, indicating that the global shift toward electric

vehicles poses challenges and opportunities.

“We all recognize Europe’s transition toward electric

and rechargeable hybrid vehicles. Carbon neutrality

goals and green deal targets will bring significant

transformations in our main export market in the

coming period,” he noted.

“Ten years from now, Türkiye should not still have an

industry predominantly producing internal combustion

engine vehicles,” Kacır stated.

“We must transition to next-generation EVs and lowemission

vehicles to maintain our competitive edge in

exports.”

Kacır emphasized that new investments would not only

boost Türkiye’s export capacity but also help prevent

an influx of imported vehicles.

“Brands like BYD, Chery and the SAIC group are

already entering global markets. Becoming an

important automotive hub will prevent us from facing

a new wave of imports in the future and will elevate

Türkiye’s export capabilities,” he noted.

Türkiye’s own electric vehicle manufacturer, Togg, is

the top EV seller in the country. It has formed a joint

venture with Farasis for battery technologies.

Togg’s assembly line is currently manufacturing T10X, a

C-segment SUV, whose sales were launched last year.

The company sold about 24,361 vehicles in the first 11

months of this year, according to industry data. It has

delivered over 40,000 units to date and is expected to

begin exports soon. Kacır reaffirmed the government’s

commitment to the brand amid speculation about

potential partnerships or acquisitions.

“Togg is a national brand and will remain so,” he

said. While acknowledging the possibility of future

technological collaborations, he dismissed any notion

of foreign ownership, reiterating Togg’s status as a

symbol of Turkish innovation.

Besides the SUV, the company will manufacture four

other models – a fastback, a C-hatchback, B-SUV and

B-MPV – by 2030.

Unveiled earlier this year, the fastback sedan, the T10F,

is scheduled to open for pre-orders in April and will

have hit the road in the first half of 2024, said Kacır.

The company has already started working on the

B-SUV model, which it named T8X. It could unveil it as

soon as next year. Togg’s production capacity is aimed

to reach 100,000 vehicles per year before increasing

to 175,000 once its plant in the northwestern Bursa

province reaches full capacity. The brand aims

to manufacture 1 million vehicles across the five

segments by 2030. Togg recently established a

technology arm, TruTech, in Ankara, where a growing

team of engineers is working on autonomous vehicle

technologies.

“We will accelerate Togg’s pace in the technology race

while also introducing Türkiye to value-added production

and R&D innovation investments,” said Kacır.

January 2025

33


New Trump tariffs would strike hard

GM, US carmakers, push prices

U.S. President-elect Donald Trump’s pledge to impose

a 25% tax on all imports from Mexico and Canada

could strike the bottom lines of U.S. automakers,

especially General Motors (GM), and push up prices of

SUVs and pickup trucks for U.S. consumers.

GM leads the automakers that export cars from Mexico

to North America. The top 10 car manufacturers with

Mexican plants collectively built 1.4 million vehicles

over the first six months of this year, with 90% heading

across the border to U.S. buyers, according to the

Mexican auto trade association.

Other Detroit manufacturers will likely also feel the

pain: Ford and Stellantis are the top U.S. producers

in Mexico after GM, whose shares fell the day after

Trump’s tariff announcement.

GM is expected to import more than 750,000

vehicles from Canada or Mexico this year, with most

manufactured south of the border, according to

business analytics firm GlobalData.

They include some of GM’s most popular vehicles,

including nearly 370,000 Chevy Silverado or GMC

Sierra full-sized pickups and nearly 390,000 midsized

SUVs.

GM’s Mexican plants also build two of its critical

new electric vehicles, battery-powered versions of

its Equinox and Blazer SUVs. Those GM models

and others are already in the crosshairs of another

expected Trump policy: ending a $7,500 EV subsidy, a

move first reported by Reuters.

GM, Stellantis and Ford declined to comment on

Trump’s proposed tariffs.

January 2025

34



January 2025

Kenneth Smith Ramos, Mexico’s former chief

negotiator for the USMCA (United States-Mexico-

Canada Agreement) trade pact, said the move could

hurt the United States as much as its North American

trading partners.

“The U.S. would be shooting itself in the foot,” he said.

The impact on Mexico’s auto industry would also be

“very negative.”

GM employs 125,000 people in North America and a

decline in sales of its Mexico-made cars could hurt its

profit for the entire region, potentially putting pressure

on payrolls on both sides of the border.

The tariff hikes would also serve as a reminder of the

supply chains, which closely bind the three members

of the United States-Mexico-Canada Agreement.

Mexico and Canada account for more than 50% of

all auto parts exported to the United States – sending

nearly $100 billion in parts. Imposing the tariffs would

increase the costs of all vehicles assembled in the

United States. The vast impact of Trump’s threatened

tariffs on Mexico and Canada raises questions

about what the incoming administration is trying to

accomplish economically and the potential collateral

damage to U.S. companies and consumers.

Trump billed the action as a punishment for the

unrelated problems of immigration and the trafficking

of the drug fentanyl, posting on social media that the

tariffs would remain in place until Mexico and Canada

halt what he called an “invasion” of “Illegal Aliens.”

The reference to drugs and migration has led some

analysts to predict the tariffs are more of a negotiating

tactic than a genuine policy proposal.

“Given the (social media) post makes an explicit

reference to the flow of people and drugs across the

southern and northern borders, it suggests this specific

tariff threat is more of a negotiating tool than a revenue

raiser,” said Thomas Ryan, North America economist at

Capital Economics.

“It leaves the door open to Canada and Mexico coming

up with a credible plan over the next two months to try

and avoid those tariffs,” he added.

Mexican President Claudia Sheinbaum called for a

dialogue with Trump and warned the proposed tariffs

lacked “sense” and would worsen inflation and kill

jobs in both countries. She also raised the specter of

retaliation, although given its vast flow of exports to

the U.S., Mexico’s economy remains more vulnerable

to tariff threats. Trump’s import taxes could also

theoretically stop Chinese automakers from using

Mexico as a way around steep U.S. tariffs on Chinese

EVs, but those imports are already effectively blocked

by other U.S. trade barriers.

Shares of GM were down 8.2% late afternoon, while

Stellantis fell 5.5% and Ford shares were down 2.6%.

Free trade with the U.S., first in the form of NAFTA

(North American Free Trade Agreement) and

then as USMCA transformed Mexico’s nascent

automotive industry into the country’s most important

manufacturing sector and the poster child of its export

prowess. But 30 years after NAFTA’s establishment,

Trump has put that all on the line.

In the hyper-competitive world of car and truck

production, a 25% tariff could kneecap a Mexican

industry that has spent years tightly integrating itself

with the U.S., the destination of nearly 80% of all

Mexican-made vehicles.

Higher tariffs would also hit U.S. consumers. While

the company that imports goods into the U.S. directly

pays the tariff, that cost is inevitably passed on to the

consumer via higher prices.

“That’s how tariffs work. Even though the (Trump)

administration might want to spin it that Mexico is

paying ... ultimately the consumer will bear this,” said

Sudeep Suman, a managing partner with consultancy

AlixPartners. That could hit many pickup trucks popular

in rural parts of the U.S. that overwhelmingly voted for

Trump. Notably, the Toyota Tacoma, Ford Maverick,

Stellantis’ Ram, and GM’s Chevrolet Silverado and

GMC Sierra are all made in Mexico.

GM might be able to absorb some costs from its

highly profitable pickup trucks but other manufacturers

selling lower-cost vehicles like the Nissan Sentra could

find it difficult to continue building profitable models,

said Sam Fiorani, industry analyst at AutoForecast

Solutions.

“Somebody is going to have to eat that cost and that

is going to the manufacturer or customer,” Fiorani said.

“All vehicles sold in the United States would be more

expensive or considerably less profitable.”

Tariffs could also hit the cost of vehicle production

in the U.S. because so many parts now come from

Mexico. The Latin American nation represents 43%

of all U.S. auto-part imports, larger than any other

country. Francisco Gonzales, head of Mexico’s National

Industry of Autoparts, said regional cooperation across

North America brings down costs for customers.

Automakers “cannot be producing everything in

a single country,” he said, “because it makes it

uncompetitive.”

36



Türkiye’s auto industry caps year

of challenges, resilience – and EV boom

January 2025

Türkiye’s automotive sector has endured a challenging

yet transformative year amid a monetary tightening

drive since mid-2023, from steady sales growth driven

by deferred demand to a major surge in the share of

hybrid and electric vehicles.

Looking ahead to 2025, industry executives forecast a

bifurcated year.

In November, passenger car and light commercial

vehicle sales climbed 5.3% year-over-year, reaching

121,094 units. The uptick, spurred by deferred demand

and new model launches, hints that year-end sales

may match last year’s 1.2 million units.

Year-to-date figures through November, however,

reveal a 0.5% contraction, with 1.07 million units sold.

While passenger car sales inched up by 0.5%, the light

commercial vehicle segment saw a 4.4% decline.

To tackle inflation, the central bank has raised its policy

rate by 4,150 basis points since mid-2023, reversing a

previous low-rate policy.

According to industry executives, challenges, including

high borrowing costs and limited financing options,

shaped consumer behavior in 2024. Additional tariffs

on Chinese imports also impacted sales.

DFSK Türkiye General Manager Çınar Noyan described

2024 as a year of stabilization after the previous year’s

record sales. Bülent Kılıçer, senior deputy general

manager at Honda Türkiye, echoed that view and said

the market remained dynamic throughout the year.

“The automotive market of Türkiye has navigated a

challenging yet transformative year under the influence

of its economic conditions,” Kılıçer told.

He noted that a market decline was anticipated, but

current data shows stable sales figures. He observed

that high interest rates and difficulties in accessing

loans led to aggressive campaigns to clear stocks.

Deferred demand and aggressive promotional

campaigns in the scope of the GSR 2 (General Safety

Regulations) regulations helped somewhat offset

market constraints, according to Noyan.

“However, difficulties in accessing financing and the

decisions to impose additional customs duties on

Chinese brands have directly affected vehicle sales

figures, especially for China-based brands like ours,”

Noyan said.

38



He said they still expect the market to stabilize at

around 1.2 million units in 2024, similar to the previous

year. Hybrid and electric vehicles have been building

on their momentum since last year, capturing a record

35.2% of the passenger car market in November.

Data from the Automotive Distributors and Mobility

Association (ODMD) shows a sharp monthly increase in

EV sales, up 45.6% to 12,970 units, and hybrid sales,

up 26.9% to 20,321 units.

They now account for 25.7% of the year-to-date

market share, up from 18.2% at the start of the year.

Kılıçer attributed the rise in hybrid and electric vehicle

sales to new model launches and evolving consumer

preferences. Brands like the national EV manufacturer

Togg have further boosted the ecosystem, accelerating

investments in charging infrastructure, Kılıçer told

Anadolu Agency.

“Many brands are introducing new hybrid and electric

models in the Turkish market, considering future

competition,” he noted.

Kılıçer noted that 2024 has been shaped by the

questioning of electric vehicles and the impacts of

economic fluctuations in the global automotive sector.

He pointed out the growing demand for electric

vehicles in China, the U.S. and partially in Europe.

“The increasing influence of Chinese manufacturers

in the European market has led national brands to

reevaluate their competition strategies. Economic

challenges and rising interest rates have suppressed

consumer demand, particularly in Western markets.

The shift of production from Europe to Eastern Europe,

Asia and North Africa aimed to reduce production

costs, expanding the impact of changes in logistics

and global supply chains that began during the

pandemic,” he noted.

“Overall, it has been a year of significant

transformations, with challenges and new opportunities

in hybrid and electric mobility solutions,” he added.

Looking ahead to 2025, industry executives see a

potential for a positive shift as of the second half of the

year, mainly on the back of lower interest rates.

Noyan expects the economic situation to adversely

affect the real sectors in the first half of the year, with

a rebound anticipated in the second half due to lower

interest rates.

“We foresee that the total market may vary up or down

by around 10% compared to 2024,” he added.

Ali Haydar Bozkurt, CEO of Toyota Türkiye Marketing

and Sales Inc., expects the inflation-fighting program to

continue in 2025 and says the minimum wage increase

as of January will be a key factor for many sectors.

“The size of the increase will significantly impact

consumers’ spending potential,” Bozkurt said on

Friday.

“However, considering the current population and

mobility needs in Türkiye, we anticipate that the market

will remain above 1 million units moving forward,” he

said.

January 2025

40



Vietnamese EV maker VinFast to

build 2nd domestic production plant

Vietnamese electric vehicle maker VinFast announced

a plan to build its second domestic production plant

that would double its output capacity, saying it is

needed to meet increased demand for its small and

mid-sized models.

VinFast said the new facility is expected to produce

300,000 units annually in its initial phase, the same

capacity as its existing plant in Haiphong. The

company delivered fewer than 45,000 cars worldwide

in the first nine months of 2024.

The new factory in the central Ha Tinh province will

primarily produce VF 3 and VF 5 models for both

domestic sales and export, with operations set to

commence in July next year, the company said in a

statement.

“Demand in international markets is growing rapidly,

so the construction of an additional electric car factory

... will produce a solid foundation for an important

and explosive development phase ahead for VinFast,”

said Nguyen Viet Quang, vice chairman and CEO of

VinFast’s parent company Vingroup.

VinFast, a subsidiary of major Vietnamese

conglomerate Vingroup, said last month its third

quarter net loss had narrowed to $550 million, which

it said reflected lower material costs and increased

production.

The automaker delivered 44,773 cars during the first

nine months of this year, just over 55% of its target of

80,000 units for the year.

Company officials have said they remain confident of

reaching the goal.

The new plant will be located in the same complex

as VinFast’s battery plant and will use parts from the

company’s existing factory in Haiphong.

VinFast has also announced plans for assembly plants

in both Indonesia and India, and has delayed the

launch of a planned North Carolina facility until 2028.

January 2025

42





Türkiye aims for 1.5 pct share of global FDI by 2028

January 2025

Trade Minister Ömer Bolat announced plans to

increase the country’s share of global foreign direct

investment (FDI) to 1.5 percent by 2028, building on

significant growth in recent years.

“Our share in foreign investments globally was 0.2

percent in the past. We increased it to 1 percent

by 2002, and our goal is to reach 1.5 percent by

2028,” Bolat said at the parliament’s plan and budget

commission. The minister’s comments come as recent

data from the International Investors Association

(YASED) shows that FDI in Türkiye reached $7.67

billion in the first three quarters of 2024, an 8 percent

year-on-year increase. Bolat highlighted the country’s

economic progress, noting that FDI in Türkiye totaled

just $1 billion between 1950-1980, rose to $15 billion

from 1980 to 2002, and surged to $271 billion between

2003 and 2024.

“While the number of foreign investors in Türkiye was

5,600 until 2002, it has now grown to 83,000 direct

investors,” Bolat added, emphasizing the country’s

improving investment climate.

According to YASED, citing Turkish Central Bank

figures, equity capital inflows accounted for $4.33

billion of the total FDI between January and September

2024. The wholesale and retail trade sector led with

$932 million, representing 22 percent of equity inflows.

Real estate investments from foreign buyers remained

a significant contributor, bringing in $2.2 billion during

the nine-month period.

The Netherlands emerged as the leading source of FDI,

responsible for 19 percent of total inflows, followed

by Germany at 12 percent and the United States at 11

percent. Bolat also noted improvements in Türkiye’s

trade balance, reporting a decrease of $27.5 billion

in imports and a $35.5 billion reduction in the foreign

trade deficit. The current account deficit for January–

September 2024 stood at $5.3 billion, a significant

improvement from previous figures.

“Türkiye is steadily increasing its share of world trade.

We have raised our share in goods exports to 1.08

percent and in services exports to 1.35 percent,” Bolat

said, adding that total exports of goods and services

have reached $375 billion. The minister attributed the

growth in foreign investment to Türkiye’s economic and

political stability, legal framework and overall economic

growth.

“Foreign investors wouldn’t come here just for our

looks. They come because of our economic policy,

political environment, and growth potential,” Bolat

remarked.

46



Experts highlight Türkiye’s prominence

amid changing global gas market

January 2025

Several experts recently evaluated Türkiye’s growing

role as a gas hub and the country’s push to curb

dependency on foreign energy sources and expand

renewables.

The global natural gas market is undergoing a

significant transformation, Gergely Molnar, an analyst

at the International Energy Agency (IEA), said,

highlighting Türkiye’s growing role “as a key player,

whether as a transit hub or a trading hub.”

The Istanbul Energy Forum, organized under the

auspices of the Ministry of Energy and Natural

Resources, gathered energy leaders from around the

world to tackle shared challenges under the theme

“Common Future, Common Goals.”

Among the highlights of the event was the panel on

“Prospects for New Technologies and Fuels in a Smart

Energy Transition,” moderated by Elif Düşmez Tek,

president of the Energy Digitalization Association.

Molnar emphasized the transformative role of liquefied

natural gas (LNG) in Europe’s energy mix, noting it has

become the continent’s new base load supply amid

soaring gas prices and shifting global energy flows.

Although natural gas prices have eased from 2022

peaks, Molnar said they remain high, with European

spot prices at $15/MMBtu (metric million British

thermal units), triple the 2020 average.

“The market remains volatile due to tight fundamentals

and geopolitical uncertainties,” said Molnar.

In the meantime, global gas demand rose 2.8% in early

2024, with all-time highs expected in 2024-2025 as

China and India lead demand growth, he said.

He said, however, that LNG supply growth lags at 2%

for 2024, though it may accelerate to 6% in 2025.

Molnar highlighted Türkiye’s growing role as a gas hub,

citing investments in LNG import infrastructure and

the Sakarya gas field, which is expected to supply 15

billion cubic meters (bcm) per year by 2028.

“Türkiye is well-positioned to become a key player,

whether as a transit hub or a trading hub. The answer

lies in the policy direction and regulatory framework

adopted by Turkish authorities,” he said.

Bora Şekip Güray, director of the Istanbul International

Center for Energy and Climate (IICEC) at Sabancı

University, outlined Türkiye’s energy goals – enhancing

energy security, advancing clean energy and ensuring

sustainability.

48


“Sustainability includes clean energy, water use, the

circular economy, and critical minerals,” he said,

emphasizing the need for balance among those

objectives. Güray stressed that collaboration across

sectors is vital to delivering secure, affordable,

sustainable energy.

He noted Türkiye’s efforts in cutting reliance on imports

by boosting domestic oil, gas and renewables, aligning

with its climate goals of peaking emissions by 2038

and achieving net zero by 2052.

Güray highlighted the push for clean electrification,

with electricity’s share in energy demand expected to

hit 50% in 25 to 30 years, driven by renewables and

nuclear power.

Kamil Cağatay Bayındır, chairperson of the Energy

Storage Systems Association in Türkiye, stressed the

importance of reducing energy import dependency

while boosting renewable adoption and ensuring

reliable power for the country’s growing needs.

“Our goal is to provide secure, reliable, affordable,

clean and sustainable energy to all,” Bayındır said.

Türkiye currently imports about two-thirds of its energy

needs, mainly fossil fuels. Bayındır noted the aim is

to reduce the dependency by half in the next decade

through increased domestic production and renewable

energy expansion.

He emphasized the need to address energy intensity,

noting progress with a 4% reduction in 2023.

Bayındır also highlighted the importance of

electrification, predicting that electricity’s share in

the final energy demand could reach 50% in the next

25 to 30 years, supported by renewables and new

technologies like electric mobility and heat pumps.

He called for investments in batteries, power grids and

hydrogen to ensure stability, particularly for sectors

that are hard to electrify.

He also stressed the importance of energy efficiency

and digital tools in optimizing energy systems.

Sohbet Karbuz, director of hydrocarbons and energy

security at the Mediterranean Observatory for Energy

(OME), on the other hand, emphasized the need to

consider the future of gas carefully and to invest

significantly in this area.

Highlighting that natural gas is a rich fuel that plays a

crucial role in the energy transition, so Karbuz pointed

to “energy addition or energy transformation” rather

than “energy transition.”

“Natural gas is not a transition fuel. It is a destination

fuel. It will not go away. It is here to stay with us for a

long time,” he said.

Alkım Bağ Güllü, director of the SHURA Energy

Transition Center, pointed out the rising demand for

energy and the increasing share of renewables within

the energy mix, emphasizing the ambitious goals in this

area.

Highlighting that the goal is to establish 120 gigawatts

(GW) of power capacity by 2035, Güllü said: “Türkiye

has a target of 7.5 gigawatts by 2035, but we have

allocated a far larger capacity than that. So, as of

today, approximately 35 gigawatts of battery energy

storage capacity has been allocated to be integrated

into wind and solar parts.”

January 2025

49


Türkiye-Finland defense industry

co-op expected to grow

January 2025

Defense industry cooperation between Türkiye and

Finland is expected to expand, along with other

fields, within NATO’s framework, according to Turkish

Ambassador to Helsinki Deniz Çakar recently.

Çakar stated that the tech startup conference

Slush 2024, held in Helsinki, was one of the most

comprehensive events in its field. She noted that

Turkish tech startups have been growing in number

each year, with around 40 participants during the

event’s inaugural year.

“This year, the number of participants from Türkiye

reached around 400, including students and

entrepreneurs, and this was made possible by the

support of the Turkish government and its development

agencies,” Çakar told.

She also highlighted the trade relations between

Türkiye and Finland, noting that the trade volume

between the two countries reached 2.1 billion euros

($2.2 billion) in 2023.

“The figure for the first eight months of this year was

around 1.2 billion euros, and we estimate it will reach

2 billion euros by the end of the year, so we expect a

similar figure to last year,” the ambassador added.

“The first meeting of the Türkiye-Finland Joint

Economic and Trade Committee (JETCO) was held

in Türkiye in 2022, and the second meeting will take

place in February 2025. We will host the Turkish

50



trade minister and a large delegation, and such

visits will significantly contribute to developing trade

relations. Finnish companies have shown interest, and

Turkish firms bring opportunities in areas like green

transformation, renewable energy, and digitalization,”

she said. Çakar noted that relations between Türkiye

and Finland have reached a new dimension since

Finland’s NATO membership, advancing steadily.

“Türkiye-Finland relations are at their best this year

as we celebrate the 100th anniversary of the start of

our relations. Increasing cooperation in the defense

industry, among other fields, benefits both countries,”

she said.

“We hosted the Finnish president twice in the past two

years, and our relations have advanced through regular

mechanisms, including on matters of terrorism, with

interior, justice and foreign affairs ministries, as well as

the permanent joint mechanism established during the

NATO membership process,” she added.

Çakar pointed out that the increased meeting traffic

benefits both countries as they “understand each other

much better” and work toward overcoming challenges.

Regarding technology and investment opportunities,

the ambassador stated that Finland serves as a

gateway to global markets, and the Slush 2024

conference presented an opportunity for “tech-oriented

young people and entrepreneurs in Türkiye.” The

Turkish Embassy in Finland is focused on fostering

cooperation between Turkish and Finnish firms.

Çakar emphasized that Finland is impressed by

Türkiye’s efforts in certain regions, encouraging Finnish

authorities and the business community to cooperate,

invest and work with Türkiye in Central Asia and Africa.

“The Turkish contracting sector continued operations

in Ukraine without interruptions, even during the war

period, and its knowledge-based support produces

room for cooperation with the Finnish contracting

sector, which we expect,” she said.

“Developing and deepening Türkiye-Finland relations

through more mutual meetings in trade and economy,

as well as within the military cooperation framework,

will provide endless opportunities and benefits to both

countries,” she concluded.

January 2025

52



Exports to ‘distant countries’ to reach $50 billion

January 2025

Türkiye aims to boost its exports to the economies

under the Distant Countries Strategy to $50 billion by

2028, Trade Minister Ömer Bolat has said.

Among the 18 targeted countries under the strategy

are the U.S., Canada, Mexico, China, South Korea,

Japan, Australia, India and Brazil.

About two-thirds of Türkiye’s total exports go to

countries that are relatively close to Türkiye, according

to a report by the Trade Ministry, which noted that

Türkiye’s average export distance remains below the

world average.

Distant countries account for 62 percent of the world’s

population and contribute to 64 percent of global GDP.

Türkiye’s goods exports to those distant countries

averaged $20 billion between 2018 and 2020,

according to the ministry.

Under the Distant Countries Strategy, Türkiye is

seeking to extend its average export range from 3,065

kilometers to the global average of 4,744 kilometers

and also to gain a foothold in distant major markets.

Singling out the U.S. as Türkiye’s important ally and

trade partner, Bolat noted that the trade has been

growing fast between the two countries in the last

five years. The trade volume of goods and services

between the two nations reached $40 billion in 2023,

the minister said, adding that the U.S. was Türkiye’s

second export market.

As part of their U.S. strategy, Bolat said that they

identify potential export products on a state-by-state

basis. Türkiye has a share of 2.9 percent in world

logistics exports, the minister also said, noting that

they aim to increase logistics exports by $50 billion in

the medium term

54



Turkish exports to African nations

exceed $15B in first 10 months

January 2025

Türkiye’s exports to African countries have surpassed

$15 billion between January and October this year,

according to a report citing foreign trade data.

The volume of shipments to African nations increased

by 1.8% in the first 10 months of the year compared

to the same period in 2023, reaching $15.1 billion,

the data compiled by Anadolu Agency from Turkish

Exporters Assembly (TIM) revealed.

Apart from robust trade, Türkiye has become an

important partner for development and investment

in Africa, strengthening cooperation in areas such as

construction and energy.

Relations between Ankara and African countries have

gained momentum in recent years and there are 44

Turkish embassies in Africa, compared to 12 in 2003.

Sales to Africa constituted 7% of Türkiye’s total exports

in the 10 months. The continent ranked sixth among the

12 country groups to which Türkiye exported the most

during this period.

In comparison, Türkiye exported $79.9 billion to

European Union countries in the first 10 months of the

year and $23.3 billion to the Middle Eastern countries.

In the first 10 months of the year, Türkiye exported the

most to Egypt among African countries, with nearly $3

billion, along with other North African countries, which

were closely followed by sales to South Africa and

Nigeria. Accordingly, exports to Egypt were determined

at $2.9 billion, Morocco at $2.5 billion, Algeria at

approximately $2 billion, Libya at $1.9 billion and

Tunisia at $859.2 million. South Africa came in next with

$514.5 million, Nigeria with $482.1 million, Djibouti with

approximately $343 million, Ghana with approximately

$313 million and Senegal with $301.1 million. When

examined sectorally, the sectors with the highest

exports to African countries in the period in question

were chemicals and products with $2.5 billion, grains,

pulses, oilseeds and its products with $2.3 billion, steel

with $1.7 billion, the automotive industry with $1.2

billion and the electrical and electronics sectors with

$1.1 billion. The sectors that increased their exports

the most over the same period were chemicals and

products with $248.5 million, jewelry with $137.7

million and textiles and raw materials with $98.6 million,

respectively. The jewelry sector made $309.7 million

in exports to African countries, while the textiles and

raw materials sector’s export volume reached $1.1

billion, and the machinery and components sector also

exported $1.1 billion worth of goods in 10 months.

The sectors with the least exports to the continent

were other ornamental plants with $2.1 million, olives

and olive oil with $12.9 million, and fresh fruits and

vegetables with $20.2 million. For the January-October

period, Türkiye’s total exports totaled $216.4 billion, up

3.2% year-over-year.

56





Current account posts surplus for four months in a row

The current account balance has posted a surplus for a

fourth consecutive month in September, data from the

Central Bank has shown. In September, Türkiye posted

a current account surplus of $2.99 billion, higher than

economists’ expectation of a $2.7 billion surplus for

the month. The current account surplus rose from $769

million in June to $1.45 billion in July and to $4.85

billion in August.

“We expect the annual current account deficit to

decline to 0.8 percent of GDP in the third quarter

and the downward trend to continue in the final

quarter,” Finance Minister Mehmet Şimşek wrote on X,

commenting on the latest data from the Central Bank.

The improved current account balance, reduced

external financing needs and increased capital inflows

contribute to reserve accumulation and support macro

stability, Şimşek said. The annual current account

deficit, which decreased by $46 billion compared to

May 2023, fell to its lowest level in 33 months, the

minister noted.

“The strong outlook for external financing continues.

Portfolio inflows were $2.9 billion were in September

and $28 billion in the first nine months. During this

period, the external debt rollover ratios of banks and

real sectors reached 166 percent and 138 percent,

respectively,” Şimşek added. Excluding gold and

energy, the current account posted a net surplus of

$7.73 billion, the Central Bank said on Nov. 12.

Exports and imports were at $21.7 billion and $24.8

billion, respectively, leading to a goods deficit of $3.1

billion, up from the previous month’s gap of $2.88

billion. Services recorded a net inflow of $7.39 billion in

September. Under services, travel items recorded a net

inflow of $5.97 billion, with the inflows in the January-

September period amounting to $37.76 billion, up from

$33.34 billion a year ago.

Non-residents’ transactions on equity securities

recorded net sales of $83 million and government

domestic debt securities recorded net purchases of

$1.73 billion, the Central Bank said.

Direct investment recorded a net inflow of $649 million

in September, while direct investment inflows in the

first 9 months of 2024 were $3.44 billion against the

inflows of $2.77 billion in the same period of last year.

Non-resident banks’ deposit accounts held within

domestic banks increased by $363 million, with a

decrease of $182 million in foreign currency and an

increase of $545 million in Turkish Lira accounts.

In January-September, the current account balance

ran a deficit of $5.27 billion, significantly lower than

the current account deficit of $36.1 billion in the same

period of 2023.

January 2025

60



‘Shipping costs to be added

to imported goods’ value’

Türkiye has introduced new regulations impacting

purchases from abroad via mail or express cargo, with

an updated article significantly altering how product

valuation and customs processes will be handled.

According to the amendment, the cost of shipping

goods to Türkiye will now be factored into the total

value of the products. This means that transportation

expenses incurred until the port or place of entry in

Türkiye will be included in the customs value.

The updated regulation authorizes the

Trade Ministry to set forth the rules and

procedures for implementing these

changes.

Additionally, the regulation comes after an

August change that lowered the tax-free

shopping limit for international purchases

from 150 euros to 30 euros, while also

increasing customs taxes on goods

ordered from abroad by 66 to 100 percent.

Once the new rule goes into effect in 30

days, buyers of products exceeding 30

euros in total value — including shipping

costs — will need to engage customs

consultancy services to complete the

necessary customs procedures.

Companies engaged in fast cargo transportation may

also act as indirect representatives using customs

brokers, granted they meet specific criteria set by

postal administrations and the Trade Ministry.

The new measures aim to streamline and tighten

control over cross-border e-commerce and mail

shipments, ensuring compliance with Türkiye’s

customs laws.

January 2025

62



Türkiye launches green, digital

transformation for high-tech exports

January 2025

Türkiye is embarking on a comprehensive green

and digital transformation effort to increase the

share of medium-high and high-tech products in its

manufacturing exports. According to information

compiled by Anadolu Agencyfrom the 2025

Presidential Annual Program, Türkiye plans to enhance

the competitiveness of its manufacturing industry by

focusing on export-oriented, technology-intensive

production that maximizes the use of local resources

while emphasizing green and digital transitions.

To this end, policies will prioritize investments,

production, employment and exports in the

manufacturing sector, aimed at fostering competitive

production through green and digital transformations.

An analysis of employment, production, trade, added

value and technology levels across manufacturing

sectors will identify priority industries, including

chemicals, pharmaceuticals and medical devices,

machinery, electrical equipment, automotive,

electronics and railway systems. This approach aims

to increase high-value-added production through

technology, innovation, product quality and efficiency.

All targeted sectors fall under the high and mediumhigh

technology categories, and advancements in

these areas are expected to contribute to reducing

the technological dependency of the manufacturing

industry and facilitating structural transformation.

By 2025, the share of medium-high technology

industries in manufacturing exports is projected to

rise from 38% to 39.5%, while high-tech products are

expected to increase from 3.9% to 4.2%, collectively

nearing a total share of 44%.

During the same period, the manufacturing sector’s

share of gross domestic product (GDP) is expected

to grow from 18.5% to 21.5%, with manufacturing

exports projected to rise from $248 billion to $268

billion (TL 8.49 trillion to TL 9.18 trillion).

To transition Turkish industry toward a technologyintensive

and high-value-added structure, the

government plans to support green and digital

transformation-focused investments, strengthen hightech

ventures, enhance collaboration between industry,

academia and government, and expand organized

industrial zones.

64


The Scientific and Technological Research Council

of Türkiye (TÜBİTAK) will support firms’ green

transformation-focused research and development

(R&D) and innovation activities. This will include the

development of green technologies, products and

processes, as well as green innovation initiatives.

Technology-based startups, SMEs, large companies,

universities, research infrastructures and public

research centers will also benefit from this support.

Funding will be provided under various initiatives,

including the Green Innovation Technology Mentorship

Support and the Green Transformation Support

for Industry, with 231 projects and 15 platform

applications currently under evaluation.

The Small and Medium Enterprises Development

Organization (KOSGEB) has approved support for 637

SMEs aimed at enhancing resource efficiency, reducing

waste production, conserving water and implementing

sustainable production methods through solar energy

investments.

Under the HIT-30 Program, implemented by the

Ministry of Industry and Technology, strategic

investments in semiconductors, mobility, green

energy, advanced manufacturing, healthy living, digital

technologies, communications and space will be

prioritized for support. In 2022, a total of 373 projects

received funding approval amounting to TL 409 million,

while 298 projects are set to receive TL 259 million in

support in 2023 and 2024. As of August, the Credit

Guarantee Fund (KGF) provided guarantees totaling

TL 1.1 trillion against a commercial credit volume of

TL 1.4 trillion across 483,000 firms through 50 support

packages. As part of the Attraction Centers Support

Program, 41 project proposals with a total budget of

TL 1.95 billion were submitted in 2023, focusing on

strengthening organized industrial zone infrastructures,

increasing production and employment and preserving

cultural heritage. The program will continue to prioritize

the development of industry and technology through

2025. Since 2021, the Producing Cities Program has

provided a total of TL 227.4 million in support for 22

projects. In 2023, 26 project proposals with a total

budget of TL 347 million were submitted, with the

process ongoing.

To enhance competitiveness and efficiency across all

sectors, Türkiye’s Green Industry Project will support

SMEs’ solar energy investments and projects in the

circular economy. Technological investments that

improve process optimization and energy efficiency

will receive support. The green transformation will also

involve local and national development of components,

equipment and systems related to hydrogen

production, storage, transportation and usage in

industry. Additionally, financing costs associated with

digital transformation processes for manufacturing

SMEs will be reduced.

Corporate capacities of model factories will

be strengthened, and lean, digital and green

transformation-focused training and consultancy

services will be offered to enterprises, especially SMEs.

January 2025

65


33 percent of exports are

transported by road transportation

Transport and Infrastructure Minister Abdulkadir

Uraloğlu has emphasized that 33 percent of

the country’s exports are transported by land,

underscoring the crucial role of road transportation in

Türkiye’s economy.

“Currently, we conduct road transportation to nearly 70

countries across three continents. Thirty-three percent

of our exports are carried out by road, reaching $71.5

billion in the first 10 months of 2024,” Uraloğlu stated,

underlining the sector’s importance.

He emphasized the modernization of road

transportation through extensive regulations since

2003. “With the implementation of the Road Transport

Regulation, the sector has become more efficient,

safe, and economical, aligning with European Union

standards. This has accelerated efforts to position

Türkiye as a global logistics hub,” he said.

Digitalization in the sector has also been a priority.

Uraloğlu noted the launch of the Transportation

Electronic Tracking and Audit System (U-ETDS) in

2018, calling it a “turning point in recording and

digitalizing the transportation field.”

Uraloğlu added that the Ministry is expanding

international agreements to boost road transportation.

“We have agreements with 60 countries, including a

recent one with Qatar. These efforts aim to enhance

Türkiye’s transportation capabilities globally,” he

explained.

He further highlighted the sector’s scale, stating that

140.9 million passengers were transported through

13.8 million trips this year, supported by approximately

900,000 drivers.

January 2025

66



Türkiye sets target to boost domestic

energy share to 63% by 2028

Türkiye’s Ministry of Energy and Natural Resources

has set a target to increase the share of domestic

resources in electricity generation to 63% by 2028 as

part of its 2024-2028 Strategic Plan.

The plan, which outlines a roadmap for sustainable

energy security and addresses the country’s unique

energy needs, aims to enhance domestic production

and reduce dependency on foreign energy sources.

The plan aims to generate 270 billion kilowatt-hours of

electricity annually from domestic resources by 2028.

It also targets increasing the installed capacity of solar

power plants to 33,100 megawatts and wind power

plants to 19,300 megawatts. Additionally, the plan

envisions bringing 4,800 megawatts of nuclear energy

capacity online. Other objectives in the plan include

raising daily domestic crude oil production to 210,000

barrels, natural gas output to 42.5 million cubic meters,

and increasing natural gas storage capacity to 12

billion cubic meters. It also targets annual mining

exports to reach $10 billion.

Seven main goals have been outlined in the plan,

including ensuring sustainable energy supply

security, reducing dependency on foreign energy,

transitioning to net-zero carbon energy, enhancing

safe and sustainable mining, and increasing

national and international effectiveness in energy

and mining markets. It also emphasizes supporting

local technology development in energy and natural

resources. Specific measures include strengthening the

national electricity grid, expanding renewable energy

capacity, improving energy efficiency, and promoting

green hydrogen and renewable gas value chains.

The plan aims to enhance the mining sector, focusing

on critical minerals and ensuring mining activities are

conducted safely and sustainably.

The ministry plans to increase integration with

international energy and mining markets to boost trade

and improve investment opportunities.

Technology development and R&D in energy and

natural resources will be prioritized, emphasizing

localizing equipment and technology.

The ministry will strengthen its institutional

infrastructure, improve governance at affiliated

agencies, and enhance digital transformation and

cybersecurity capabilities. It also aims to bolster

disaster and emergency response capacities.

January 2025

68



EBRD investments in Türkiye tops 21 bln euros

Odile Renaud-Basso, the president of the European

Bank for Reconstruction and Development (EBRD),

has announced that the bank’s investments in Türkiye

have reached 2.2 billion euros so far this year, bringing

total investments to over 21 billion euros. Following her

meetings with President Recep Tayyip Erdoğan and

other Turkish officials, Renaud-Basso discussed the

EBRD’s priorities in Türkiye. She stated that they talked

about supporting various projects, strategic policy

objectives and how to bolster investment opportunities

in the country.

Describing Türkiye as a key market, Renaud-Basso

outlined the focus of the bank’s activities in recent

years.

“This year, we’ve already signed 2.2 billion euros of

investment, and with some time still left before the

year ends, we expect to come close to last year’s

investment level of 2.5 billion euros, which was our

highest annual investment in Türkiye,” Renaud-Basso

explained.

She also highlighted that 50 percent of EBRD’s

investments are directed toward the green sector, with

over 60 percent of these investments incorporating

a gender component aimed at increasing female

participation in the workforce.

She also welcomed the latest economic policies aiming

at curbing inflation.

“Loose monetary policy led to inflation, but there has

been progress in balancing the current account deficit.

We expect inflation to drop to around 40-45 percent by

the end of the year,” Renaud-Basso noted.

Renaud-Basso said that the EBRD has been investing

in Türkiye since 2009, making it the bank’s largest

investment destination to date.

January 2025

70





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