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Monthly automotive aftermarket magazine
GROUP CHAIRMAN
H. FERRUH ISIK
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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.
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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