Automotive Expotrs January 2023

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Monthly automotive aftermarket magazine<br />




İstmag Magazin Gazetecilik<br />

İç ve Dış Ticaret Ltd. Şti.<br />

Managing Editor (Responsible)<br />

Mehmet Söztutan<br />

mehmet.soztutan@img.com.tr<br />

Advertising Managers<br />

Adem Saçın<br />

+90 505 577 36 42<br />

adem.sacin@img.com.tr<br />

EDİToR<br />

Mehmet Soztutan, Editor-in-Chief<br />

mehmet.soztutan@img.com.tr<br />

Enes Karadayı<br />

enes.karadayi@img.com.tr<br />

International Marketing Coordinator<br />

Ayca Sarioglu<br />

ayca.sarioglu@img.com.tr<br />

Editor<br />

Yusuf Okçu<br />

yusuf.okcu@img.com.tr<br />

Finance Manager<br />

Cuma Karaman<br />

cuma.karaman@img.com.tr<br />

Digital Assets Manager<br />

Emre Yener<br />

emre.yener@img.com.tr<br />

Technical Manager<br />

Tayfun Aydın<br />

tayfun.aydin@img.com.tr<br />

Design & Graphics<br />

Sami aktaş<br />

sami.aktas@img.com.tr<br />

Accountant<br />

Yusuf Demirkazık<br />

yusuf.demirkazik@img.com.tr<br />

Subsciption<br />

İsmail Özçelik<br />

ismail.ozcelik@img.com.tr<br />


İstmag Magazin Gazetecilik<br />

İç ve Dış Ticaret Ltd. Şti.<br />

Ihlas Media Center<br />

Merkez Mah. 29 Ekim Caddesi No: 11B / 21<br />

Yenibosna Bahcelievler, Istanbul / TÜRKİYE<br />

Tel: +90 212 454 22 22<br />

www.img.com.tr sales@img.com.tr<br />

KONYA:<br />

Metin Demir<br />

Hazım Uluşahin İş Merkezi C Blok<br />

Kat: 6 No: 603-604-605 KONYA<br />

Tel: (90.332)238 10 71 Fax: (90.332)238 01 74<br />



Merkez Mahallesi 29 Ekim Caddesi İhlas Plaza<br />

No:11 A/41 Yenibosna–Bahçelievler/ İSTANBUL<br />

Tel: 0212 454 30 00<br />

www.ihlasmatbaacilik.com<br />

Dynamism prevails…<br />

We know that competitiveness at the domestic level has been replaced with<br />

competitiveness on a global scale, when it comes to automotive industry. The Turkish<br />

automotive industry, which was originally founded for import-substitution purposes and<br />

focused on the domestic market for a long period, transformed itself into a production<br />

base for a number of global models.<br />

In motor vehicles, a large number of EU legislation was adopted. Türkiye has been<br />

continuing efforts to introduce the relevant legal arrangements, and significant progress<br />

has been achieved in this field.<br />

Meanwhile, Türkiye’s first domestically produced electric vehicle brand, Togg will have a<br />

competitive price tag compared to its peers and even cars with combustion engines, once<br />

it hits the roads in the first months of <strong>2023</strong>.<br />

The Turkish automotive industry is one of the four largest exporting and leading investor<br />

industries of the Turkish economy. It is an economically strategic sector in terms of its<br />

significant contribution to the national production and development, direct and indirect<br />

employment and level of technology in Türkiye. The automotive parts industry is strong<br />

and competitive. It has developed in parallel with the development of Türkiye's automotive<br />

industry both in quality and production volumes.<br />

Following the shift of the focus on customers, markets, products and competition from<br />

the local level to the global level, Turkish automotive manufacturers and suppliers position<br />

themselves globally rather than locally.<br />

This transformation in the sector urges automotive suppliers to improve their existing<br />

structures in line with the demands of global auto manufacturers.<br />

Turkish producers of parts and components have attained high standards reflected by<br />

large export volumes to the Western countries.<br />

The Turkish automotive parts and components industry has now developed to the stage<br />

where it is at a level ready to take advantage of the globalization and structural changes in<br />

the world automotive industry. A number of firms active in the industry have been named<br />

the "co-designer" in the global vehicles manufactured in Türkiye.<br />

Our publications, by participating in major international fairs and exhibitions, remain at<br />

the service of those businesses people seeking to increase their share in the increasingly<br />

competitive foreign markets.<br />

We are convinced that these events would be instrumental to increase business<br />

opportunities in the automotive industry.<br />

We wish lucrative trade for all participants.<br />

automotiveexport<br />


Vehicle sales<br />

may hit 120,000<br />

Total vehicle sales may climb to 120,000 in<br />

December, surpassing the 110,000 mark for<br />

the first time in five years, according to an<br />

executive from carmaker Fiat.<br />

Potential consumers are heading to dealers<br />

to buy new cars before the end of the year<br />

after the government announced the new<br />

price thresholds for a special consumption<br />

tax (SCT) on vehicles.<br />

However, the problem in the market is<br />

the insufficient supply of cars, while some<br />

potential buyers are facing difficulties<br />

obtaining loans for purchasing vehicles in<br />

high segments.Despite those problems, the<br />

combined sales of passenger cars and light<br />

commercial vehicles are expected to climb<br />

to 120,000 in December.<br />

“Demand is strong. Depending on the<br />

availability of vehicles, sales could reach<br />

120,000 vehicles this month,” said Altan<br />

Aytaç, the brand director at Fiat.<br />

After the SCT issue became clear, demand<br />

in the market picked up, he told reporters<br />

at an event in Istanbul, which was<br />

organized to introduce Fiat’s two new light<br />

commercial vehicle models.<br />

“We are expecting sales to be around<br />

110,000 or even 120,000 vehicles in<br />

December. For the whole year, we forecast<br />

780,000 sales,” Aytaç said.<br />

For his company, Aytaç projected that Fiat<br />

will sell 124,000 vehicles this year and that<br />

its market share will be 18.6 percent.<br />

The latest data from the <strong>Automotive</strong><br />

Distributors’ and Mobility Association<br />

(ODMD) showed that the combined sales<br />

of passenger cars and light commercial<br />

vehicles increased 37 percent year-on-year<br />

in November to 82,311.<br />

<strong>January</strong> <strong>2023</strong> 10

<strong>Automotive</strong> exports rise to $2.9 billion<br />

Turkish carmakers increased their exports<br />

by 13.7 percent in November from a<br />

year ago to $2.87 billion, data from the<br />

Uludağ <strong>Automotive</strong> Industry Exporters’<br />

Association (OİB) have shown.<br />

The share of the automotive industry in<br />

Türkiye’s overall export revenues was 13.2<br />

percent.<br />

The country’s exports stood at $21.85<br />

billion, rising 1.9 percent from a year ago.<br />

The supply sector’s exports amounted to<br />

$1.15 billion, rising 12 percent compared<br />

with November 2021, while passenger<br />

car exports increased by 2 percent on an<br />

annual basis to $847 million. The sales<br />

of bus, minibus and midibus to foreign<br />

markets recorded a 33 percent increase<br />

from a year ago to $207 million.<br />

Despite the 2 percent decline in exports<br />

to $387 million, Germany was still the<br />

largest market for local carmakers. Sales<br />

for France grew 2 percent to $296 million,<br />

while exports to Italy, the third largest<br />

market, soared 49 percent year-on-year to<br />

$270 million.<br />

Exports to the U.K, the U.S., and Russia,<br />

other major markets for the Turkish<br />

automotive industry, grew by 10 percent,<br />

28 percent and 39.5 percent, respectively.<br />

From <strong>January</strong> to November, automotive<br />

exports grew by 5.6 percent from the<br />

same period of 2021, amounting to $27.8<br />

billion. The average monthly export<br />

revenue of the industry was $2.54 billion.<br />

Türkiye’s export revenues increased by<br />

13.9 percent in the first eleven months<br />

of 2022 from a year ago to stand at $231<br />

billion.<br />

The $2.87 billion exports recorded in<br />

November was the highest figure this<br />

year, said Baran Çelik, the board chair of<br />

OİB, adding that the automotive industry<br />

managed to increase its exports despite<br />

the slowdown and recession risks in the<br />

global economy.<br />

<strong>January</strong> <strong>2023</strong> 12

Automechanika Dubai - A heartfelt thank<br />

you for the overwhelming response<br />

Nowember 2022 saw a record breaking<br />

edition of Automechanika Dubai which<br />

was held on 22 – 24 November 2022 at the<br />

Dubai World Trade Centre.<br />

43,103 visitors from 153 countries joined<br />

1,145 exhibitors from 53 countries<br />

along with 20 official country pavilions<br />

to discover new opportunities, explore<br />

innovations, engage in serious business<br />

conversations and sign new deals.<br />

The officials of the Fair noted:<br />

We, at Automechanika Dubai, would<br />

like to express our sincere and heartfelt<br />

gratitude to our exhibitors, sponsors,<br />

partners, speakers, visitors and the global<br />

automotive aftermarket community for<br />

the overwhelming response for the 2022<br />

edition of the show.<br />

With the tremendous positive response<br />

that we have received, planning is already<br />

underway for a special 20th Anniversary<br />

Edition of Automechanika Dubai which will<br />

be held on 15 – 17 November <strong>2023</strong> at the<br />

Dubai World Trade Centre.<br />

Automechanika Dubai Awards Celebrates<br />

the Best in <strong>Automotive</strong> Aftermarket.<br />

The global automotive aftermarket<br />

industry came together on the morning<br />

of the 23rd November to celebrate the<br />

industry’s excellence, achievements and<br />

innovations recognising individuals and<br />

organisations at the Automechanika Dubai<br />

Awards.<br />

With the world of automotive aftermarket<br />

gathered at Automechanika Dubai, the<br />

exhibition saw a number of contracts and<br />

MoUs signed onsite.<br />

Al Shamali Auto Parts signed a<br />

commemoration certificate marking 30<br />

years of co-operation between them and<br />

PT Edico in the presence of H.E. Husin<br />

Bagis, the Ambassador of Indonesia to<br />

the UAE; while Mineral Circles Bearings<br />

were appointed as official distributors for<br />

Corteco and GMB at the show. Goodyear<br />

also announced their foray into lubricants<br />

at Automechanika Dubai 2022.<br />

<strong>January</strong> <strong>2023</strong> 14

Industrial production growth<br />

gains momentum<br />

The pace of annual growth of industrial<br />

production increased from 0.5 percent in<br />

September to 2.5 percent in October, data<br />

from the Turkish Statistical Institute (TÜİK)<br />

have shown.<br />

In the manufacturing sector, output<br />

growth strengthened from 1.7 percent<br />

to 3.7 percent, while intermediate goods<br />

production, which fell 5 percent in<br />

September, declined again by 5 percent<br />

year-on-year in October.<br />

The annual increase in the durable<br />

consumer goods manufacturing sector<br />

picked up from 0.4 percent from 5.5<br />

percent, but non-durable consumer goods<br />

production grew 2.9 percent year-on-year,<br />

easing from the previous month’s 7.1<br />

percent.<br />

The energy sector’s production contracted<br />

3.6 percent in October from a year earlier,<br />

after falling 1.4 percent in September.<br />

The year-on-year production growth in<br />

the capital goods sector leaped from 7.2<br />

percent in September to 26.6 percent.<br />

The mining and quarrying industry’s output<br />

was down 7.4 percent, which came on<br />

top of the 16.5 percent contraction in the<br />

sector’s production in the previous month.<br />

On a seasonally and calendar-adjusted<br />

basis, Türkiye’s industrial production<br />

increased by 2.4 percent in October from<br />

September, when output contracted 1.6<br />

percent month-on-month. Retail sales<br />

<strong>January</strong> <strong>2023</strong> 18

volume TÜİK also reported on Dec. 13<br />

that the retail sales volume index climbed<br />

9.5 percent in October compared with<br />

the same month of 2021.<br />

Food, beverages and tobacco product<br />

sales increased by 10.8 percent on an<br />

annual basis, while non-food retail sales<br />

exhibited a yearly rise of 11.8 percent<br />

and automotive fuel sales were up 1.1<br />

percent.<br />

Electronic goods and furniture sales rose<br />

by 11.4 percent and computer, books and<br />

telecommunications equipment sales<br />

increased by 30.5 percent year-on-year.<br />

Retail sales via mail and the internet<br />

grew 26.5 percent, while overall retail<br />

sales increased by 1.4 percent in October<br />

from September.<br />

Separate data from TÜİK showed that the<br />

combined turnover in the construction,<br />

industry, trade and services sectors<br />

exhibited an annual increase of 124.8<br />

percent in October, after rising 135<br />

percent in the previous month. In the<br />

industry sector, the annual increase in<br />

turnover was 121 percent, while it was<br />

114 percent in construction.<br />

In the trade and services sectors,<br />

turnover grew by 126 percent and 155<br />

percent, respectively.<br />

The combined revenues of those four<br />

industries increased by 3.9 percent in<br />

October from September.<br />

<strong>January</strong><br />

19 <strong>2023</strong>

Equipmake unveils<br />

high-power-dense<br />

e-axle for makers<br />

of performance EV<br />

Leading automotive electrification<br />

specialist Equipmake launched the<br />

Ampere-220 e-axle: a compact, lightweight,<br />

high-power electric drive system for<br />

manufacturers of high-performance<br />

electric vehicles.<br />

Debuted at LCV-Cenex, it combines one<br />

of the most advanced 3D-printed electric<br />

motors in the world with all power<br />

electronics, including the company’s own<br />

silicon carbide inverter, and an integrated<br />

transmission system in a compact unit that<br />

directly powers the vehicle’s axle, bringing<br />

a step change in off-the-shelf performance<br />

for electric sports cars and supercars.<br />

At its heart, the e-axle features the Ampere<br />

electric motor, which draws on both<br />

Equipmake’s world-leading expertise in<br />

electric motors - featuring a spoke rotor<br />

design which has recently also featured<br />

in the Ariel HIPERCAR in the form of<br />

Equipmake’s APM motor - and pioneering<br />

knowledge in additive manufacturing and<br />

thermal engineering from Bristol-based<br />

HiETA.<br />

Extremely lightweight yet efficient and<br />

cost-effective, Ampere has peak power<br />

of 220kW and a maximum motor speed<br />

of 30,000rpm. Weighing just under 20kg,<br />

it offers power density of 11kW per kg –<br />

more than twice that of a conventional<br />

electric motor. The key to its performance<br />

is its combination of Equipmake’s spoke<br />

design with additive manufacturing,<br />

allowing Ampere’s metal structure to<br />

be 3D-printed, rather than milled from<br />

a solid billet. Bringing many advantages,<br />

firstly, metal is only put where it is<br />

needed. Secondly, thermally efficient thin<br />

walls and optimised fine surface details<br />

are combined directly with the motor’s<br />

structure, replacing multi-part assemblies<br />

with a single, complex architecture that has<br />

exceptional cooling ability, is lightweight,<br />

has low inertia and allows for greatly<br />

increased rotational speed.<br />

Making its debut in the Ampere-220 e-axle,<br />

the advanced electric motor is combined<br />

with all necessary power electronics,<br />

including Equipmake’s high-performance<br />

silicon carbide-based inverter, and an<br />

integrated transmission system too,<br />

resulting in a<br />

state-of-the-art, highly compact and<br />

lightweight electric drive system that<br />

is ready to be integrated into a highperformance<br />

electric vehicle.<br />

Debuted in twin-motor specification,<br />

Ampere-220 e-axle offers 440kW peak<br />

power per axle with a total unit weight of<br />

just 85kg. Equipmake can also develop a<br />

single-motor<br />

e-axle application with 220kW of peak<br />

power per axle. The Ampere-220 e-axle is<br />

designed, engineered, and manufactured<br />

at Equipmake’s headquarters in Snetterton,<br />

Norfolk, where the company provides the<br />

complete electric vehicle solution, offering<br />

everything from motors to fully electrified<br />

platforms, supporting primarily the<br />

automotive and aerospace sectors.<br />

Ian Foley, Equipmake CEO, said:<br />

“Equipmake has always been at the<br />

forefront of innovation in electric motors,<br />

with our APM range offering class-leading<br />

power densities thanks to their compact,<br />

lightweight designs. Ampere showcases<br />

the next leap, and combined with our own<br />

power electronics, including our silicon<br />

carbide inverter, and transmission system,<br />

we have created the Ampere-220 e-axle.<br />

With such a huge amount of performance<br />

in a compact, lightweight electric drive<br />

unit, one that is also ISO 26262-compliant<br />

and ASIL-D ready, Ampere-220 e-axle<br />

provides the total off-the-shelf highperformance<br />

electric solution for<br />

manufacturers of electric sports cars<br />

and supercars. It further underlines<br />

Equipmake’s position as a leading provider<br />

of state-of-the-art electrification systems to<br />

the automotive industry.”<br />

<strong>January</strong> <strong>2023</strong> 22

MÜSİAD Expo brought together hundreds of<br />

companies, businesspeople from across globe<br />

Nov. 2-5, including ambassadors from<br />

Developing Eight (D-8) countries – Türkiye,<br />

Bangladesh, Egypt, Indonesia, Iran,<br />

Malaysia, Nigeria, and Pakistan, he added.<br />

Asmali said the expo makes a tangible<br />

impact on international trade, citing the<br />

fact that 17 institutions from 11 countries<br />

signed cooperation agreements.<br />

One of the agreements was signed with<br />

D-8 Secretary General Isiaka Abdulkadir<br />

Imam, under which MUSIAD will enhance<br />

ties with the D-8 and make our cooperation<br />

more comprehensive, he added.<br />

“The participation of Turkish President<br />

Recep Tayyip Erdogan, Parliament Speaker<br />

Mustafa Sentop, Turkish ministers, Turkic<br />

Republic of Northern Cyprus Prime<br />

Minister Unal Ustel among other senior<br />

ministers and representatives of foreign<br />

countries is a testament to the importance<br />

of the expo,” Asmali noted.<br />

During the event, MUSIAD unveiled<br />

two new bodies – MUSIAD Invest and<br />

MUSIAD Trade Office – to further bolster<br />

its international reach and operations, he<br />

added.<br />

The Independent Industrialists’ and<br />

Businessmen’s Association (MUSIAD) Expo<br />

“has turned into a commercial diplomacy<br />

event,” the organization’s head Mahmut<br />

Asmali said.<br />

Some 600 companies from around the<br />

world participated in the 19th MUSIAD<br />

Expo organized in Istanbul, with visitors<br />

coming from countries including Algeria,<br />

Saudi Arabia, Germany, Iraq, Pakistan,<br />

Russia, Egypt, Indonesia, Jordan, Austria,<br />

and Morocco, Asmali said in a statement.<br />

Top officials from several countries also<br />

attended the four-day event held on<br />

<strong>January</strong> <strong>2023</strong> 24

Toyota cuts<br />

output target<br />

amid chip<br />

crunch as profit<br />

tumbles 25%<br />

Toyota Motor Corp. posted a worse-thanexpected<br />

25% drop in quarterly profit<br />

and cut its annual output target, as the<br />

Japanese firm battles surging material costs<br />

and a persistent semiconductor shortage.<br />

The world’s biggest automaker by sales<br />

also warned that it remained difficult to<br />

predict the future after posting its fourth<br />

consecutive quarterly profit decline,<br />

underlining the strength of business<br />

headwinds it faces.<br />

During the coronavirus pandemic, Toyota<br />

fared better than most carmakers in<br />

managing supply chains, but it fell victim<br />

to the prolonged chip shortage this<br />

year, cutting monthly production targets<br />

repeatedly.<br />

“We’re out of the worst phase, but... it’s<br />

not necessarily a situation where we’re<br />

fully supplied,” said Kazunari Kumakura,<br />

Toyota’s purchasing group chief. “I don’t<br />

know when the chip shortage will be<br />

resolved.”<br />

Operating profit for the three months<br />

ended September fell to 562.7 billion yen<br />

($3.79 billion), well short of an average<br />

estimate of 772.2 billion yen in a poll of 12<br />

analysts by Refinitiv. Toyota sales reported<br />

a 749.9 billion yen profit a year earlier,<br />

and 578.6 billion yen in profit in the first<br />

quarter. Kumakura said the global auto chip<br />

shortage continues, as chipmakers have<br />

prioritized supplies for electronics goods<br />

such as smartphones and computers, while<br />

natural disasters, COVID-19 lockdowns and<br />

factory disruption have slowed a recovery<br />

in auto chip supplies.<br />

He also said the supply of older-type<br />

semiconductors, which attract little capital<br />

investment currently, would remain tight.<br />

Amid the gloom, shares in Toyota closed<br />

down 1.9%, versus a 0.3% rise in the Nikkei<br />

average.<br />

‘Very unimpressive’<br />

Some analysts were underwhelmed by the<br />

performance, saying other positive factors<br />

beyond the chip shortage should have<br />

provided a boost.<br />

“The yen is weaker in the second quarter,<br />

the volume in the second quarter is much<br />

higher than in the first quarter, and the<br />

(COVID-19) lockdown in China does not<br />

affect (the volume in the second quarter),”<br />

said Koji Endo, an analyst at SBI Securities.<br />

“Considering these points... the absolute<br />

amount of profit in the second quarter<br />

has got to be higher than that of the first<br />

quarter. It is very unimpressive.”<br />

Production rebounded by 30% in the<br />

quarter, but the company warned that<br />

shortages of semiconductors and other<br />

components would continue to constrain<br />

output in coming months.<br />

Toyota said it now expects<br />

to produce 9.2 million<br />

vehicles this fiscal year,<br />

down from the previously<br />

forecast 9.7 million but still<br />

ahead of last financial year’s<br />

production of about 8.6<br />

million units.<br />

Toyota had told several<br />

suppliers it was setting a<br />

global target for the current<br />

business year to 9.5 million vehicles<br />

and signaled that the forecast could be<br />

lowered, depending on the supply of<br />

electromagnetic steel sheets.<br />

Muted yen impact<br />

The yen has plunged around 30% this<br />

year against the U.S. dollar, but the<br />

benefit of the cheap yen - making sales<br />

overseas worth more - has been offset by<br />

soaring input costs.The weak yen boosted<br />

profit by 565 billion yen in the first half<br />

of this financial year, but the gain was<br />

more than wiped out by 765 billion yen<br />

increase in material costs, with the cheap<br />

local currency further inflating import<br />

costs, Toyota said. Toyota retained its<br />

conservative profit outlook, sticking to its<br />

full-year operating forecast of 2.4 trillion<br />

yen for the fiscal year through March 31<br />

– well below analysts’ average forecast<br />

of 3.0 trillion yen. By comparison, South<br />

Korea’s Hyundai Motor raised its revenue<br />

and profit margin guidance to reflect a<br />

foreign exchange lift. Toyota, once a darling<br />

of environmentalists for its hybrid gasolineelectric<br />

models, is also under scrutiny from<br />

green investors and activists over its slow<br />

push into fully electric vehicles (EV).<br />

Just a year into its $38 billion EV plan,<br />

Toyota is already considering rebooting<br />

it to better compete in a market growing<br />

beyond its projections.<br />

In a reputational hit, Toyota had to recall<br />

earlier this year its first mass-produced<br />

all-electric vehicle after just two months<br />

on the market due to safety concerns, and<br />

suspend production. It restarted taking<br />

leasing orders for domestic market.<br />

Toyota reiterated that battery-powered<br />

EVs are a powerful weapon for<br />

decarbonization, but that there are various<br />

other options to achieve the goal.<br />

<strong>January</strong> <strong>2023</strong> 26

Exports in Turkish lira up<br />

182% year-over-year<br />

Exports in Turkish lira increased by 182% in<br />

September compared to the same month<br />

of the previous year, reaching TL 16.3<br />

billion ($877.2 million), according to the<br />

official data.<br />

The overall exports in rose by 9.2% yearover-year,<br />

amounted to $22.6 billion,<br />

according to the report by Anadolu Agency<br />

(AA) which cited data from the Trade<br />

Ministry.<br />

In September, foreign trade volume<br />

increased by 26% compared to the same<br />

period of 2021 and reached $55.6 billion,<br />

while imports reached $33 billion due to<br />

the increase in energy and commodity<br />

prices.<br />

While exports in Turkish lira were TL 7.2<br />

billion in <strong>January</strong>, imports were TL $12.1<br />

billion and the foreign trade volume<br />

increased to TL 19.1 billion.<br />

In this category, exports were TL 8.5<br />

billion, imports were TL 13.5 billion, and<br />

foreign trade volume was TL 22.9 billion in<br />

February. In March, the said exports were<br />

calculated as TL 9.2 billion, imports were TL<br />

17.1 billion, and the foreign trade volume<br />

was TL 26.4 billion.<br />

In April, exports in Turkish lira reached TL<br />

8.4 billion, imports reached TL 17.5 billion,<br />

and foreign trade volume reached TL 26.1<br />

billion. In May, this export amounted to TL<br />

7.4 billion, imports amounted to TL 19.9<br />

billion, and the trade volume was TL 26.5<br />

billion.<br />

Exports in Turkish lira reached TL 9.9<br />

billion in June, while imports reached<br />

TL 22.2 billion. Foreign trade volume<br />

was calculated as TL 32.2 billion in the<br />

said month. The aforementioned export<br />

amount was recorded as TL 7.9 billion,<br />

imports as TL 18.5 billion and foreign trade<br />

volume as TL 26.5 billion in July.<br />

Exports in Turkish lira were TL 10.3 billion<br />

in August, and imports were TL 23.8 billion.<br />

Foreign trade volume was determined as TL<br />

34.1 billion in August.<br />

In the <strong>January</strong>-September period of this<br />

year, the export made in the national<br />

currency increased by 89% compared to<br />

the same period of the previous year and<br />

reached TL 85.2 billion. In this period,<br />

imports in Turkish lira were recorded as TL<br />

172.2 billion and foreign trade volume was<br />

recorded as TL 257.2 billion.<br />

In September, the number of countries to<br />

which exports were made in the national<br />

currency was 170 and the number of<br />

exporting companies was 6,907. In August,<br />

the number of countries was 164 and the<br />

number of exporting companies was 6,439.<br />

<strong>January</strong> <strong>2023</strong> 28

$250B export target reachable despite global headwinds<br />

Türkiye is aiming for $250 billion (TL 4.55<br />

trillion) in exports this year, Trade Minister<br />

Mehmet Muş said, stressing that the<br />

country maintains the goal despite signs<br />

of a global slowdown and inflationary<br />

pressures.<br />

Muş was speaking at the 4th Türkiye<br />

Export Mobilization summit. The event<br />

was organized by Türkiye’s leading media<br />

group and Daily Sabah’s parent company,<br />

Turkuvaz Media, in the southeastern<br />

province of Gaziantep.<br />

The minister separately wrote on Twitter<br />

that exports in August hit an all-time<br />

monthly high yet again, reaffirming the<br />

views that the annual target would be<br />

achieved even before the year-end.<br />

Foreign sales jumped 13.1% year-over-year<br />

to $21.3 billion, Muş said. Imports rose at a<br />

much faster pace, jumping 40.7% to $32.6<br />

billion Exporters have managed to achieve<br />

record sales in each month so far this year<br />

and in 22 of the last 24 months.<br />

The trade deficit surged by 162% to a<br />

record $11.3 billion in August, data from<br />

the Turkish Exporters Assembly (TIM)<br />

showed. The shortfall in the first eight<br />

months jumped by 146.4% to $73.4 billion,<br />

mainly due to rising energy import costs.<br />

Deteriorating global conditions,<br />

exacerbated by the war in Ukraine, have<br />

raised concerns for the rest of the year.<br />

Russia’s invasion of its neighbor has<br />

sent global commodity prices soaring,<br />

endangering Türkiye’s economic program<br />

that aims to tackle high inflation with a<br />

current account surplus.<br />

Exports had ended 2021 at $225.4 billion,<br />

a figure that government and economists<br />

expected to reach $250 billion this year.<br />

Muş said that they want to diversify the<br />

regions that Turkish businesses export to,<br />

focusing on North and South America and<br />

East Asia, not just Europe.<br />

More than half of Türkiye’s export is<br />

destined for Europe, he said, however,<br />

the uncertainty in the region produces<br />

obstacles.<br />

“Compared to the 2021 period, our exports<br />

to this region increased by 17.2% in the<br />

<strong>January</strong>-August period,” the minister said,<br />

but this increase “is in a moderate trend<br />

compared to months.”<br />

“The uncertainty and slowdown in Europe<br />

weaken demand. For example, while our<br />

exports to the EU increased by 17.8% in<br />

June compared to the previous year, the<br />

increase was 5.2% in July and 2.7% in<br />

August.”<br />

“We are trying to diversify the market. We<br />

want to focus not only on Europe but also<br />

on North America, then on Latin America,<br />

some countries in the Far East. This will<br />

take some time, and expectations such as<br />

the slowdown in the world, the uncertainty<br />

in Europe and whether there will be a<br />

power cut or not inevitably pull down<br />

demand.”<br />

“The slowing demand there is pushing<br />

down our exports here,” he said.<br />

<strong>January</strong> <strong>2023</strong> 30

Four trends<br />

shaping the<br />

motor<br />

Euromonitor International examines how<br />

automotive industry performs globally<br />

and in the largest countries in terms<br />

of automotive output. The report also<br />

provides data for production, market<br />

size, imports, exports, industry’s costs,<br />

industry’s profitability and number of<br />

companies. The industry and market<br />

overview provide benchmarks against<br />

other countries in the region.<br />

Electrification<br />

Stricter emission standards and the<br />

technological limitations of internal<br />

combustion engines will drive investments<br />

in electric and hybrid vehicle production.<br />

Manufacturers will have to unlock more<br />

resources for investments and strengthen<br />

battery supply.<br />

Connected vehicles<br />

Changing consumer preferences and<br />

stricter vehicle safety regulations will<br />

require more investments in connected<br />

vehicle technologies. This will gradually<br />

change the supply chain, with electronics<br />

and technology providers gaining greater<br />

share. At the same time, connected<br />

vehicles can help to open up new business<br />

models and revenue streams for car<br />

manufacturers.<br />

Supply chain localization<br />

The COVID-19 pandemic had severe effects<br />

on the automotive industry’s global supply<br />

chains. To better shield from similar risks<br />

in the future, manufacturers are planning<br />

to increase supply chain localization. This<br />

would produce regional production hubs<br />

and could benefit Eastern Europe and Latin<br />

America thanks to lower operating costs<br />

and geographic proximity to the largest<br />

automotive markets.<br />

Consolidation of suppliers<br />

Rising operating costs and supply chain<br />

changes will continue to support the<br />

consolidation of suppliers. Suppliers will<br />

need to collaborate as they feel pressure<br />

from OEM and technology companies, and<br />

at the same time must find resources to<br />

invest in electrification programs.<br />

<strong>January</strong> <strong>2023</strong> 32

Inflation to ease soon as Türkiye’s economy<br />

model yields results<br />

Türkiye’s exports are approaching the $300<br />

billion threshold by breaking records every<br />

month, President Recep Tayyip Erdoğan<br />

said as the country tries to navigate<br />

the economic crisis with a model that<br />

promotes growth via exports, employment,<br />

production and a current account surplus.<br />

The president also said that the negative<br />

impact of inflation will begin to ease as of<br />

the beginning of the new year thanks to<br />

the measures taken by the government.<br />

Erdoğan sent a video message to the<br />

Türkiye <strong>2023</strong> Summit and Money Talks<br />

organized by Turkuvaz Media Group in<br />

Istanbul.<br />

Expressing his hope that the summit will<br />

be beneficial, Erdoğan congratulated the<br />

media group on the event that saw the<br />

participation of many respected names and<br />

thanked all the participants who enriched<br />

the program with their ideas, presentations<br />

and evaluations.<br />

Stating that the world has been going<br />

through a painful process over the last<br />

three years that started with the pandemic<br />

and then grew more complicated with hot<br />

conflicts and regional tensions, Erdoğan<br />

said that energy, food and raw material<br />

prices, which have reached the highest<br />

levels in recent years, and the subsequent<br />

inflation problem is an issue all economies<br />

are facing.<br />

Meanwhile, he stated that the classical<br />

approach to reducing inflation by raising<br />

interest rates has not met expectations<br />

thus far, adding that many economies that<br />

try to restrain inflation with such policies<br />

are struggling with employment losses and<br />

facing a cost-of-living crisis.<br />

Under the country’s economic program,<br />

dubbed the “Türkiye Economy Model,” the<br />

Turkish government prioritizes low-interest<br />

rates to boost exports, production and<br />

investments, aiming to lower inflation and<br />

flip the country’s chronic current account<br />

deficits to a surplus.<br />

In line with the model, Türkiye’s central<br />

bank in its last meeting in November<br />

lowered its key policy rate, or the one-week<br />

repo rate, by 150 basis points to 9.0%.<br />

The lender said the easing cycle that<br />

started in August has come to an end as it<br />

was assessed that the current policy rate is<br />

at a sufficient level, taking into account the<br />

increasing risks to global demand.<br />

Price increases moderated in Türkiye in<br />

November, recent official data showed,<br />

signaling that inflation pressures that have<br />

been plaguing consumers for about a year<br />

and a half might be finally easing.<br />

The annual consumer price index (CPI)<br />

dipped to 84.39%, the Turkish Statistical<br />

Institute (TurkStat) announced, ending a<br />

17-month-long cycle of rises.<br />

It dropped from a 24-year peak of 85.51%<br />

in October and marked the first time that<br />

<strong>January</strong> <strong>2023</strong> 34

annual inflation has eased since May 2021,<br />

when the CPI stood at 16.6%.<br />

Emphasizing that Türkiye is one of<br />

the countries that went through an<br />

economically troubled period relatively<br />

comfortably thanks to its robust<br />

infrastructure and economic model,<br />

Erdoğan further said, “Our industrial zones,<br />

factories and manufacturing facilities are<br />

working hard. Our roads and highways are<br />

full of trucks and trucks that carry loads<br />

from our country to Europe, Asia and the<br />

Middle East.”<br />

Türkiye’s exports remained buoyant and<br />

rose 15.4% from <strong>January</strong> through October<br />

this year to $209.5 billion, according to<br />

official data, marking an all-time 10-month<br />

high.<br />

Türkiye has set a $250 billion export target<br />

for this year, after reaching a record $225<br />

billion in 2021.<br />

Erdoğan also noted that Türkiye reached a<br />

new stride by going beyond compensating<br />

for the losses in the tourism sector,<br />

which was hit the most by the pandemic,<br />

highlighting that it succeeded in exceeding<br />

the 31 million mark in employment for the<br />

first time.<br />

Tourism revenues are vital to Türkiye’s<br />

economy in reaching its current account<br />

surplus goals.<br />

The government raised its year-end tourism<br />

targets for the second time this year in late<br />

October. It now expects 50 million tourists<br />

and $44 billion in revenues, up from the 47<br />

million tourists and $37 billion set in July<br />

and the 45 million arrivals and $35 billion<br />

in income it had estimated at the beginning<br />

of the year.<br />

Energy supply security<br />

The president further expressed that<br />

efforts are continuing to commission the<br />

540 billion cubic meters (bcm) of natural<br />

gas discovered in the Black Sea to reduce<br />

the country’s energy dependency.<br />

Meanwhile, Minister of Energy and Natural<br />

Resources Fatih Dönmez, also delivering<br />

an online speech to the event, stated that<br />

Türkiye has the infrastructure, technical<br />

equipment, international knowledge and<br />

experience to produce, import, trade and<br />

export natural gas.<br />

“Our aim is to become a gas trade center<br />

where reference gas prices are determined<br />

in the region and in the world. Hopefully,<br />

we will clarify our road map on this issue<br />

toward the end of the year,” he said.<br />

Noting that they are looking forward to<br />

bringing domestic gas to the Turkish nation<br />

in <strong>2023</strong> and that nine out of 10 wells have<br />

drilled within the scope of the first phase of<br />

the work, Dönmez said, “85% of our Filyos<br />

Land Gas Processing Facility, which will<br />

separate the gas from the sea, has been<br />

completed.”<br />

“I hope the Sakarya gas field will be the<br />

world’s fastest offshore field development<br />

project from exploration to first<br />

production,” the minister said.<br />

Dönmez also noted that the 4.6 bcm<br />

expansion phase of the Silivri Natural Gas<br />

Storage Facility has been completed and<br />

“hopefully will open with the participation<br />

of President Erdoğan.”<br />

Apart from the investments made in<br />

the renewables sector, Türkiye aims to<br />

reduce its dependency on foreign energy<br />

and external financing needs to further<br />

ease the pressure on the current account<br />

balance by commissioning the natural gas<br />

discovered in the Black Sea by <strong>2023</strong>.<br />

<strong>January</strong><br />

35 <strong>2023</strong>

China launches WTO dispute over US chip sanctions<br />

China has filed a dispute with the World<br />

Trade Organization over U.S. restrictions on<br />

chip exports, Beijing’s commerce ministry<br />

said in a statement late on Dec. 12,<br />

accusing Washington of threatening global<br />

supply chains. The United States in October<br />

announced new export controls aimed<br />

at restricting China’s ability to buy and<br />

manufacture high-end chips with military<br />

applications, complicating Beijing’s push to<br />

further its own semiconductor industry and<br />

develop advanced military systems.<br />

The moves include export restrictions on<br />

some chips used in supercomputing as<br />

well as stricter requirements on the sale<br />

of semiconductor equipment. The aim is<br />

to prevent “sensitive technologies with<br />

military applications” from being acquired<br />

by China’s military, intelligence and security<br />

services, the US Commerce Department<br />

said in October.<br />

But China’s Ministry of Commerce on<br />

Dec. 12 accused the United States of<br />

“obstructing normal international trade in<br />

products including chips and threatening<br />

the stability of the global industrial supply<br />

chain”, as well as violating international<br />

trade rules and engaging in “protectionist<br />

practices”.<br />

The WTO dispute is intended to defend<br />

China’s “legitimate rights and interests”,<br />

the ministry said in its statement, urging<br />

Washington to “give up zero-sum thinking”.<br />

The two superpowers have long faced<br />

off over a range of issues including<br />

technology, trade, Hong Kong, Taiwan and<br />

human rights. Chinese leader Xi Jinping<br />

and US President Joe Biden pledged to<br />

repair frayed relations at a summit in<br />

Bali, Indonesia. Days before the latest<br />

chip controls, the Pentagon added 13<br />

more Chinese firms including drone<br />

manufacturer DJI and surveillance firm<br />

Zhejiang Dahua Technology to a blacklist of<br />

military-linked entities.<br />

<strong>January</strong> <strong>2023</strong> 38

Türkiye’s Togg<br />

aims to enter<br />

European<br />

market in 2024<br />

Türkiye’s first domestically produced electric<br />

car brand Togg aims to enter the European<br />

market by the end of 2024, its CEO Gürcan<br />

Karakaş said.<br />

Speaking to the Turkish-German Economy<br />

Forum in Germany’s capital Berlin, Karakaş<br />

said the firm will “probably enter markets of<br />

Scandinavian countries first.”<br />

He added that Scandinavian countries are<br />

more open to new brands, more open to<br />

electric vehicles, and their infrastructure<br />

is more widespread. He also said that the<br />

Togg vehicle, seen in Berlin and went viral<br />

on social media, was brought to Germany<br />

for testing. Starting the project in 2018,<br />

Togg began the mass production phase in<br />

October as President Recep Tayyip Erdoğan<br />

inaugurated the long-anticipated massive<br />

manufacturing plant in the northwestern<br />

province of Bursa. Togg will debut in the<br />

market in the first quarter of <strong>2023</strong> with the<br />

SUV, its first smart device in the C segment,<br />

after the completion of homologation tests.<br />

The brand’s CEO, who opened the<br />

production plant doors to the group of<br />

reporters at the end of November, said<br />

that the price of the first model would be<br />

announced in February, while Togg will likely<br />

hit the roads as of the end of March.<br />

The electric vehicle produced by a<br />

consortium of five Turkish companies called<br />

the Automobile Initiative Group of Türkiye,<br />

or Togg, will produce five different models<br />

– a SUV, sedan, C-hatchback, B-SUV and<br />

B-MPV – until 2030 and own its intellectual<br />

and industrial property rights.<br />

Industry and Technology Minister Mustafa<br />

Varank, who spoke at the “InovaTIM<br />

Innovation Contest Award Ceremony,”<br />

remarked on Togg’s developments, noting<br />

that it has become the locomotive of the<br />

system transformation, standing at the<br />

forefront of a new industrial revolution that<br />

began with the opening of its plant, which<br />

stands as a first project in the “Century of<br />

Türkiye” showcase.<br />

“Togg, whose intellectual property rights<br />

belong to us 100%, will activate new<br />

technology-based initiatives. It will enable<br />

new unicorns to emerge. It will develop the<br />

battery and charging technologies ecosystem<br />

in our country. It will contribute to the<br />

development of electric motor capacity,”<br />

he added. The car brand aims to produce 1<br />

million vehicles by 2030, with some 30,000<br />

units to be sold for public services through<br />

2035, Karakaş announced earlier.<br />

<strong>January</strong> <strong>2023</strong> 42

<strong>Automotive</strong> production hits 1.2 million vehicles<br />

The Turkish automotive industry’s<br />

production increased by 6 percent in<br />

the first 11 months from a year ago<br />

to 1.2 million vehicles, data from the<br />

<strong>Automotive</strong> Manufacturers’ Association<br />

(OSD) have shown.<br />

Local companies’ passenger car output<br />

rose by 2 percent compared to the<br />

<strong>January</strong>-November period of 2021 to<br />

717,368 units, while commercial vehicle<br />

production grew 13 percent year-on-year.<br />

The capacity utilization rate in the<br />

automotive industry was 68 percent,<br />

with the capacity usage in the passenger<br />

cars and light commercial vehicles<br />

segment standing at 68 percent and in<br />

the trucks segment at 90 percent.<br />

The local automotive industry’s export<br />

revenues increased by 5 percent yearon-year<br />

in <strong>January</strong>-November to 876,187<br />

vehicles. Passenger car sales to foreign<br />

markets grew 0.4 percent, and the<br />

increase in light commercial vehicle<br />

exports was 12 percent from the first<br />

11 months of 2021. Tractor exports<br />

also exhibited an annual increase of 11<br />

percent.<br />

The automotive sector’s share in<br />

Türkiye’s total exports was 12 percent in<br />

<strong>January</strong>-November 2022, which made it<br />

the second-largest exporting industry.<br />

The latest data from the Uludağ<br />

Exporters’ Assembly, the country’s<br />

automotive sector generated $28.3<br />

billion in export revenues in the first 11<br />

months of 2022, rising 5 percent from a<br />

year ago. In terms of euro, the industry’s<br />

export grew by 19 percent to 26.9 billion<br />

euros. Domestic vehicle sales remained<br />

almost unchanged in the <strong>January</strong>-<br />

November period compared to the same<br />

period at 705,183 vehicles.<br />

Some 505, 886 passenger cars were sold,<br />

pointing to a 2 percent contraction in<br />

this market, but light commercial vehicle<br />

sales grew 6 percent on an annual basis.<br />

The shares of domestically produced<br />

passenger cars and light commercial<br />

vehicles in total saVles were 38 percent<br />

and 58 percent, respectively.<br />

Multiple challenges occurred<br />

simultaneously in 2022, said Cengiz<br />

Eroldu, the president of the OSD.<br />

As predicted initially, the automotive<br />

industry will close the year with around<br />

1 million vehicle exports and 1.36 million<br />

vehicle production, he added.<br />

“The year <strong>2023</strong> will be difficult to predict<br />

because of uncertainties. There are<br />

issues in global trade that are beyond<br />

our control. It is necessary to produce<br />

an environment which will unleash the<br />

potential in the domestic market, and<br />

to diversify the export markets and<br />

maintain our competitiveness in the<br />

international markets,” Eroldu said.<br />

<strong>January</strong> <strong>2023</strong> 44

More than a car: Togg apps prepare for ‘test drive’<br />

Fresh from rolling out its long-anticipated<br />

first domestically produced automobile<br />

brand, Türkiye has been highlighting not<br />

only the fact that it will be battery-powered<br />

but also all the features that will make it<br />

more than just a car.<br />

CEO Gürcan Karakaş has been stressing<br />

this from the start, dubbing Togg a smart<br />

device full of mobility solutions, nextgeneration<br />

technologies and innovation, all<br />

of which promise to redefine the customer<br />

experience.<br />

Calling itself a technology brand that<br />

blends digital and physical experiences,<br />

Togg has joined hands with startups to<br />

produce a new mobility ecosystem and has<br />

been working on experience scenarios.<br />

The vehicle is being produced by a<br />

consortium of five Turkish companies called<br />

the Automobile Initiative Group of Türkiye,<br />

or Togg, in cooperation with the Union of<br />

Chambers and Commodity Exchanges of<br />

Türkiye (TOBB).<br />

If we are to accept the smart, electric<br />

autonomous moving device as the top<br />

of the iceberg, Togg has introduced the<br />

ecosystem that lies beneath for the first<br />

time.<br />

The brand has now launched one of the<br />

most important concepts of this ecosystem<br />

named Trumore.<br />

The software promises to add new<br />

technologies to in-car services, offering<br />

users a one-stop application that<br />

will enable access to all the artificial<br />

intelligence (AI) tech needed when it<br />

comes to a vehicle.<br />

Trumore is an infrastructure that will<br />

enable users to benefit from multiple<br />

new services, including renting a vehicle,<br />

selecting a cost-effective driving route,<br />

accessing in-car payment technologies<br />

and benefiting from discounts on public<br />

transportation and air travel.<br />

It also features calculations on power<br />

consumption and carbon emissions.<br />

Karakaş said the fact that they embarked<br />

on their journey with “artists” who<br />

produce in a digital environment was no<br />

coincidence. He stressed they are trying to<br />

shape the entire mobility experience that<br />

the user will go through while moving from<br />

point A to point B.<br />

Karakaş said all smart devices outside Togg<br />

would be included in the scenario that<br />

will be shaped according to the customer<br />

experience.<br />

On the cooperation side, Togg has been<br />

focusing on strategic areas such as mobility<br />

solutions, big data, cybersecurity, FinTech,<br />

blockchain, gamification, smart grids and<br />

mobility services.<br />

Karakaş said Togg has been announcing<br />

cooperations with startups. He cited a<br />

smartphone transformation while speaking<br />

of the ongoing breakthrough.<br />

“Whatever happened years ago when the<br />

mobile phone turned into a smartphone, a<br />

similar transformation is now happening in<br />

the automobile world,” Karakaş noted.<br />

Profitability, user experience, and<br />

everything is changing as cars turn into<br />

smart devices. We are responding with<br />

scenarios that we think will ensure we keep<br />

pace with this change.”<br />

Growing with startups<br />

Speaking of Trumore, the CEO said it<br />

is a digital platform that redefines the<br />

mobility experience by taking it beyond just<br />

traveling from point A to point B.<br />

“Through Trumore, which it positions as<br />

a mobile application with strong business<br />

partnerships and many features, Togg<br />

is offering personalized, user-oriented,<br />

intelligent and empathetic experience<br />

with new generation technologies such as<br />

fintech, insurtech, blockchain, internet of<br />

things (IoT), artificial intelligence, providing<br />

uninterrupted user experience,” said<br />

Karakaş.<br />

Trumore is a platform that earns, navigates,<br />

entertains and constantly develops for<br />

users, he noted. User experience is at the<br />

center of the Trumore business model and<br />

technology, he added.<br />

“Togg defines its platform, which can<br />

process data and improve it with artificial<br />

intelligence, as a ‘user empathy platform,’”<br />

said Karakaş.<br />

Underlining that they cooperate more with<br />

startups, Karakaş stated that they will be<br />

announcing the names and details of the<br />

partnerships soon.<br />

Multiple features, concepts<br />

The Trumore application has been<br />

founded based on concepts that include<br />

“Earn, Go, Play, Scale.”<br />

Its Earn.more covers services that help<br />

users gain, and features FinTech solutions<br />

that offer uninterrupted payment and<br />

rewarding experiences.<br />

The e-wallet, which is within the scope of<br />

Earn.more services enable the creation<br />

of in-car payment, mobile payment and<br />

digital asset wallets.<br />

Under digital asset management, various<br />

reward programs (such as points, NFTs),<br />

digital art collections and NFTs that are<br />

linked to the business model are offered<br />

to the users.<br />

It also features a digital magnet<br />

acquisition application that will enable<br />

users to earn many rewards.<br />

The digital magnet is produced specifically<br />

for the person and journey according<br />

to the route produced by the user and<br />

according to the travel conditions at that<br />

time.<br />

Go.more, which provides location-based<br />

smart services that navigate the user and<br />

provide personalized route suggestions,<br />

features mixed mobility services, charging<br />

networks, restaurants and reservation<br />

operations, all of which promise an<br />

uninterrupted mobility experience for<br />

users.<br />

The savings calculator within the<br />

application makes it possible to take<br />

advantage of services such as road tolls,<br />

electricity consumption and carbon<br />

emission calculations.<br />

Play.more will feature smart life services<br />

that will entertain the user, making<br />

everyday life easier and more enjoyable<br />

through gamification.<br />

Play.more’s services comprise smart life<br />

solutions, usage-based insurance services,<br />

in-car and mobile game applications and<br />

smart health applications.<br />

On the other hand, Togg expresses the<br />

concept of USE CASE Mobility, which it<br />

defines as user-centric, smart, emphatic,<br />

connected, autonomous, shared and<br />

electric, through digital art. It makes<br />

the user experience the concepts of<br />

“Human-Technology,” “East-West,”<br />

“Mind-Heart,” “Unity-Multiplicity” and<br />

“Today-Tomorrow” in the world of duality<br />

through its “Digital Art Mode.”<br />

Users can also link the digital art on the<br />

smart device screen to their TVs or digital<br />

screens at home if they want.<br />

<strong>January</strong> <strong>2023</strong> 46

Over 80K<br />

China-made<br />

Teslas recalled<br />

over software,<br />

seat belt issues<br />

Tesla Inc. is recalling more than 80,000<br />

China-made and imported cars produced as<br />

early as 2013 due to software and seat belt<br />

issues, a statement by the Chinese market<br />

regulator revealed. The U.S.-based electric<br />

car maker has recalled 67,698 Model S and<br />

Model X cars imported to China between<br />

Sept. 25, 2013 and Nov. 21, 2020, due to<br />

software problems affecting the battery<br />

management system in the vehicles.<br />

Tesla said it will upgrade the software of<br />

recalled vehicles.<br />

Tesla also recalled 2,736 imported Model<br />

3 cars manufactured between <strong>January</strong><br />

and November 2019, and 10,127 Chinamade<br />

ones of the same model produced<br />

between Oct. 14, 2019 and Sept. 26, 2022.<br />

This was due to potentially faulty seat<br />

belt installation which Tesla will check and<br />

reinstall, it said.<br />

In April, Tesla recalled a total of 127,785<br />

units of Model 3 cars in China, citing<br />

potential faults in semiconductor<br />

components that might lead to collisions.<br />

<strong>January</strong> <strong>2023</strong> 48

Ambitions high<br />

as Türkiye’s<br />

1st car brand<br />

said to feature<br />

competitive<br />

price tag<br />

Türkiye’s first domestically produced<br />

electric vehicle brand will have a<br />

competitive price tag compared to its peers<br />

and even cars with combustion engines<br />

once it hits the roads in the first months<br />

of <strong>2023</strong>, its CEO said. Togg began mass<br />

production and sales of its first model, the<br />

C-segment SUV, are set to begin at the end<br />

of the first quarter of the year. It will be the<br />

first electric sport utility vehicle produced<br />

in continental Europe by a nontraditional<br />

manufacturer. It puts Türkiye and President<br />

Recep Tayyip Erdoğan closer to fulfilling a<br />

long-held dream of building the country’s<br />

first national automobile.<br />

Dubbing it a smart device that features<br />

advanced technology, CEO Gürcan Karakaş<br />

said the price of the first model would be<br />

announced in February.<br />

“Togg will have a price that will compete<br />

with vehicles in its class, including internal<br />

combustion engines. All pre-orders will start<br />

to be taken as of February <strong>2023</strong>,” Karakaş<br />

told a group of reporters at Togg’s factory in<br />

the northwestern province of Bursa.<br />

“Togg smart device will hit the roads as of<br />

the end of March,” he added.<br />

The vehicle is being produced by a<br />

consortium of five Turkish companies called<br />

the Automobile Initiative Group of Türkiye,<br />

or Togg, in cooperation with the Union<br />

of Chambers and Commodity Exchanges<br />

of Türkiye (TOBB). Karakaş said Togg is a<br />

project that features a 3.5-billion-euro ($3.6<br />

billion) investment that will be spread over<br />

15 years. Around 1.8 billion euros of this<br />

will have been spent by the end of <strong>2023</strong>, he<br />

added.<br />

“This resource includes investments for the<br />

development of smart devices, campuses<br />

and technology.”<br />

Besides the SUV, Togg will manufacture<br />

another four models – a sedan,<br />

C-hatchback, B-SUV and B-MPV – through<br />

2030. Mass production of the SUV will be<br />

followed by the sedan.<br />

The brand aims to produce 1 million<br />

vehicles across the five segments by 2030.<br />

Some 30,000 units will be sold for public<br />

services through 2035, Karakaş said.<br />

The current production capacity stands at<br />

around 100,000 vehicles per year, a figure<br />

that Karakaş says is expected to reach<br />

175,000 once the Togg’s factory reaches<br />

its full capacity. The peak output will also<br />

see employment at the plant more than<br />

triple to 4,300, up from the current figure<br />

of 1,400, the CEO said. The 90% automized<br />

facility set up on a 1.2 million square meter<br />

area in Bursa’s Gemlik district will reach a<br />

capacity of manufacturing one vehicle every<br />

three minutes, he noted.<br />

Togg’s SUV is built from 51% locally made<br />

parts, Karakaş noted, saying 75% of<br />

suppliers are based in Türkiye. He cited an<br />

aim to lift the rate of parts made within the<br />

country to 68% in the three years.<br />

Orders placed by individuals will be<br />

prioritized in <strong>2023</strong>, throughout which<br />

Karkaş says Togg aims to manufacture and<br />

deliver around 20,000 vehicles.<br />

“Orders will be received with individual<br />

users as a priority and will be delivered<br />

throughout <strong>2023</strong>. The first smart device<br />

will be launched to the traffic at the end of<br />

March.”<br />

The joint venture plans to export the EVs to<br />

Europe and then the rest of the world after<br />

up to 18 months of only domestic sales,<br />

Karakaş said.<br />

Vehicles that have been rolled out are being<br />

sent to accreditation test centers abroad for<br />

certification and homologation procedures,<br />

the CEO noted.<br />

“The devices are subjected to 92 different<br />

tests, 16 of which are new regulations. The<br />

number of devices sent for the tests will<br />

reach 165 by the end of December,” he<br />

said.<br />

“They will complete their tests and receive<br />

type approvals. After receiving the type<br />

approvals, mass production for the users will<br />

begin with orders.”<br />

The car was designed by Italy’s Pininfarina<br />

design company, which has produced models<br />

for Ferrari and California-based electric<br />

carmaker Karma.<br />

The consortium inked a deal with Farasis, one<br />

of the world’s most prominent companies, to<br />

build a lithium-ion battery factory near Togg’s<br />

production site in Bursa. Togg has already<br />

launched efforts to set up a charging station<br />

network across Türkiye under a brand named<br />

Trugo. Over 1,000 stations that will feature<br />

charging capacities of between 180 kilowatts<br />

(kW) and 300 kW are aimed to be established<br />

at over 600 spots in 81 provinces.<br />

Karakaş said the first stations were set up<br />

at a stopover along the highway between<br />

Istanbul and Ankara. Stressing the company’s<br />

focus on innovative technologies, Karakaş<br />

said the company has held talks with over<br />

300 startups engaged in everything from<br />

blockchain and digital payments to mapping<br />

to date and already works with 19 ventures.<br />

Togg set out with a plan in which smart<br />

device revenues and other revenues are<br />

balanced, the CEO said.<br />

“It will receive revenue from both the sale of<br />

devices and the use of its mobile services. At<br />

the same time, since it can control battery<br />

and software costs, this will also contribute to<br />

its profitability.”<br />

<strong>January</strong> <strong>2023</strong> 52

Demand for<br />

SUVs leaps as<br />

Türkiye awaits<br />

its 1st national<br />

car on roads<br />

The demand for sport utility vehicles<br />

(SUVs) in Türkiye has gained pace in the<br />

first 11 months of this year, according to<br />

industry data, in a trend that comes as<br />

the country’s first domestically produced<br />

electric car brand is set to hit the roads.<br />

Some 208,693 units of SUVs have been<br />

sold from <strong>January</strong> through November<br />

this year, according to the <strong>Automotive</strong><br />

Distributers and Mobility Association<br />

(ODMD) data, up 15.4% versus the same<br />

period of 2021.<br />

Consumer preferences boosted the share<br />

of SUVs in overall car sales to 41.3%, up<br />

from 35% a year ago, according to the data<br />

that showed sedans’ share dropping to<br />

37.2%, down from 39.4%.<br />

Some 188,244 sedan automobiles were<br />

sold in the first 11 months. Hatchbacks<br />

sit third with a 19.7% share, down from<br />

23.7% in 2021, and 99,815 sales, the data<br />

showed. Overall sales of passenger cars<br />

and light commercial vehicles in Türkiye<br />

slipped 1% year-over-year in the <strong>January</strong>-<br />

November period to 688,063 units, the<br />

ODMD said, driven by soaring prices and<br />

as problems from logistics bottlenecks<br />

to an ongoing chip shortage curbed<br />

production. Passenger car sales were<br />

down 2.4% from a year ago to 505,886<br />

vehicles, while light commercial vehicles<br />

saw a drop of 3.4% to 162,177 according<br />

to the ODD. Yet sales in November<br />

jumped 36.7% year-over-year to 82,311<br />

units, up from 60,216 a year ago. Sales of<br />

both passenger cars and light commercial<br />

vehicles were up 37.8% and 34%,<br />

respectively.<br />

The share of SUVs is expected to gain<br />

even further pace once Türkiye’s first<br />

domestically produced electric vehicle<br />

brand hits the roads in the first months<br />

of <strong>2023</strong>. Togg began mass production in<br />

late October and sales of its first model,<br />

the C-segment SUV, are set to begin at the<br />

end of the first quarter of the year.<br />

It will be the first electric sport utility<br />

vehicle produced in continental Europe by<br />

a nontraditional manufacturer.<br />

The vehicle is being produced by a<br />

consortium of five Turkish companies<br />

called the Automobile Initiative Group<br />

of Türkiye, or Togg, in cooperation with<br />

the Union of Chambers and Commodity<br />

Exchanges of Türkiye (TOBB).<br />

Besides the SUV, Togg will manufacture<br />

another four models – a sedan,<br />

C-hatchback, B-SUV and B-MPV – through<br />

2030. Mass production of the SUV will be<br />

followed by the sedan.<br />

The brand aims to produce 1 million<br />

vehicles across the five segments by 2030.<br />

The current production capacity stands at<br />

around 100,000 vehicles per year, a figure<br />

that is expected to reach 175,000 once<br />

the Togg’s factory reaches its full capacity.<br />

<strong>January</strong> <strong>2023</strong> 54

David Brown <strong>Automotive</strong> Mini Remastered<br />

Marshall Edition lands in Paris and makes<br />

European Debut<br />

David Brown <strong>Automotive</strong> has unveiled<br />

its Mini Remastered Marshall Edition – a<br />

classic Mini reimagined in collaboration<br />

with the iconic audio equipment brand<br />

Marshall Amplification – in Paris, making its<br />

European debut.<br />

The modernised take on the classic Mini<br />

– conceived to commemorate Marshall<br />

Amplification’s 60th anniversary – will<br />

be on show until 12th December in the<br />

CITADIUM complex, bringing timeless<br />

British style, and considerable rock and roll<br />

appeal, to the French capital.<br />

The cutting-edge, boutique space –<br />

home to a carefully curated selection<br />

of internationally renowned luxury and<br />

fashion brands - will play host to this 21st<br />

century take on a the classic Mini, which<br />

is on show to the public for the very first<br />

time.<br />

Launched to great fanfare earlier this<br />

year, Mini Remastered Marshall Edition<br />

is handcrafted alongside other Mini<br />

Remastered variants, as well as the<br />

Speedback grand-tourer range, at David<br />

Brown <strong>Automotive</strong>’s state of the art facility<br />

in Silverstone, UK.<br />

Michelle Gay, Sales & Marketing Director,<br />

<strong>January</strong> <strong>2023</strong> 56

David Brown <strong>Automotive</strong>, said: “Mini Remastered Marshall<br />

Edition is a stunning example of precision design and<br />

handmade quality, bringing two British brands together.<br />

It is a modern, rock and roll take on one of Britain’s most<br />

iconic shapes and we are delighted to bring it to the heart<br />

of Paris - the world’s fashion and style capital.”<br />

Each David Brown <strong>Automotive</strong> Mini Remastered is<br />

painstakingly hand-built over thousands of hours, reengineered<br />

from the ground up using a new shell; it’s a<br />

classic Mini reimagined for the 21st century, enhanced<br />

with a sumptuously trimmed interior and comprehensively<br />

remastered mechanicals. Mini Remastered Marshall<br />

Edition is distinguished from the core Mini Remastered<br />

range by unique colour, materials and finishes – all<br />

inspired by the styling of Marshall’s iconic products, as<br />

well as an amazing Marshall 8-speaker sound system and<br />

pull-out amp in the loadspace.<br />

The special colour scheme to Mini Remastered<br />

Marshall Edition is unique to the limited run machines,<br />

finished in exclusive ‘Marshall Black’ paint, which is<br />

complemented by dark-chrome exterior brightwork,<br />

offset by contrasting ‘Marshall Gold’ painted accents. Mini<br />

Remastered Marshall Edition is also packed with unique<br />

audio equipment features, developed in partnership<br />

between David Brown <strong>Automotive</strong> and the engineers<br />

at Marshall. Mini Remastered Marshall Edition’s special<br />

features include a meaningfully upgraded in-car sound<br />

system, as well as a bespoke Marshall DSL1 Combo<br />

amplifier neatly integrated into in the Mini’s leatherlined<br />

luggage compartment. Arthur Grison, Key Account<br />

Manager, Zound Industries (the distributor of Marshall<br />

Amplification in France), added: “Since revealing Mini<br />

Remastered Marshall Edition earlier this year – a key part<br />

of the celebrations to mark Marshall’s landmark 60th<br />

anniversary. We can’t wait to see the response from the<br />

public during the car’s star turn in Paris in the build-up to<br />

a very busy Christmas shopping period.”<br />

<strong>January</strong><br />

57 <strong>2023</strong>

Turkish exports<br />

to surpass<br />

year-end target<br />

As 2022 draws to a close, Türkiye’s exports<br />

will not fall below the year-end target that<br />

was set, Trade Minister Mehmet Muş said.<br />

Türkiye has set a $250 billion export target<br />

for this year, after reaching a record $225<br />

billion in 2021.<br />

“We will not fall short of the target we set<br />

for exports,” Muş told a summit organized<br />

by Türkiye’s leading media group and Daily<br />

Sabah’s parent company, Turkuvaz Media,<br />

in Istanbul.<br />

“Our target was set at $250 billion, and we<br />

will exceed that,” he noted.<br />

However, Muş added that there is a<br />

slowdown in foreign demand, especially<br />

due to recent rate hikes, which they will try<br />

to circumvent with minimal impact.<br />

“Our upward trend has continued since the<br />

second half of the year, but now we have a<br />

slower increasing trend due to a decrease<br />

in external demand.”<br />

Muş said an additional target of $80 billion<br />

was added year, with the aim to diversify<br />

the market to reach it.<br />

One of the main drivers of Türkiye’s<br />

economic growth this year, exports hit<br />

record-high volumes throughout the<br />

first 11 months of this year. Yet, a global<br />

slowdown has put a drag on foreign<br />

demand, notably among Türkiye’s largest<br />

trade partners, spearheaded by Europe.<br />

Outbound shipments from <strong>January</strong> through<br />

November jumped 14% from a year ago to<br />

$231 billion, while imports were up 36.6%<br />

to nearly $331.1 billion, driven mainly by<br />

steep rises in energy and commodity prices<br />

after Russia’s invasion of Ukraine.<br />

Muş previously said there has been a<br />

slowdown in the growth trend of exports,<br />

citing weakening demand in the European<br />

Union, where almost half of the Türkiye’s<br />

shipments go.<br />

“A slowdown there (in Europe), whether<br />

we want it or not, a drop in demand there<br />

affects our exports,” he said.<br />

<strong>January</strong> <strong>2023</strong> 60

Crisis in Europe<br />

touted as<br />

opportunity for<br />

Turkish retailers<br />

The recession risks that are plaguing<br />

Europe have triggered an exodus of brands<br />

from shopping malls, in what seems to<br />

have turned into an opportunity for Turkish<br />

retailers.<br />

Mall investors have particularly shifted<br />

their focus to Turkish brands that attended<br />

the largest annual international gathering<br />

for retailers, MAPIC 2022.<br />

More than 80 firms and a delegation of 250<br />

people attended the landmark event joined<br />

by the world’s leading retail brands and real<br />

estate players. The fair in Cannes, France<br />

ran from Nov. 29 through Dec. 1.<br />

Companies gathered at the Turkish Brands<br />

booth under the coordination of the<br />

Istanbul Apparel Exporters’ Association<br />

(IHKIB) at the fair, with Alkaş serving as<br />

MAPIC’s Türkiye representative.<br />

The Turkish booth included many<br />

prominent players such as AC&co Altınyıldız<br />

Classics, Chakra, D’S Damat, Ipekyol, Kiğılı,<br />

Madame Coco, NaraMaxx, Nebim, Penti ve<br />

Perspective. Among others, Tavuk Dünyası<br />

and GAGAVA attended the fair with their<br />

own booths.<br />

Hilal Suerdem, deputy chair of Kiğılı,<br />

stressed the fact that the fair was<br />

extremely dynamic this year, also<br />

highlighting what he said was a “warmer<br />

approach” toward Turkish brands.<br />

Haluk Özkarakaşlı, the head of NaraMaxx,<br />

stated that it was important for Turkish<br />

brands to take part in such a fair. “This is<br />

an important platform for brands to show<br />

themselves,” Özkarakaşlı said.<br />

For their part, Osman Çavuşoğlu, Altınyıldız<br />

general manager in charge of international<br />

operations, emphasized that they have<br />

grown abroad and turned the crisis into<br />

an opportunity after the coronavirus<br />

pandemic. Penti International Franchise<br />

Manager Yavuz Mert stressed there has<br />

been a high demand for Turkish brands<br />

from many places after the recession in<br />

Europe. Sabah, the flagship publication<br />

of Turkuvaz Media Group and its sister<br />

newspaper of Daily Sabah gathered the<br />

attending retailers at a dinner event it<br />

organized on the sidelines of MAPIC.<br />

The event at the Hotel Barriere Le Majestic<br />

was attended by Suerdem, Özkarakaşlı and<br />

his wife Yeliz Özkarakaşlı, İpekyol member<br />

of the board Necdet Ayaydın and Alkaş<br />

Consultancy Chairperson of the Board Avi<br />

Alkaş, among others.<br />

Retailers extended their appreciation<br />

for Turkuvaz Media Group’s support<br />

and efforts to promote the Turkish retail<br />

industry. Meanwhile, retailers have started<br />

to open stores in the metaverse as well.<br />

NaraMaxx’s Özkarakaşlı said they have<br />

been continuing their activities in the<br />

women’s clothing sector for more than<br />

10 years. He said the whole world has<br />

seen more clearly with the pandemic that<br />

keeping up with digital transformation is<br />

one of the most powerful ways to increase<br />

brand awareness.<br />

“Since 2020, we have added digital<br />

transformation to our brand values,<br />

started to make new investments in the<br />

field of technology and have established<br />

a digitalization team within our company.<br />

In the past two years, we have achieved<br />

projects in the fields of blockchain,<br />

NFTs (non-fungible tokens) and the<br />

metaverse. We have opened a store on<br />

the Decentraland platform, one of the first<br />

metaverse projects,” he noted.<br />

<strong>January</strong> <strong>2023</strong> 62

China’s producer<br />

prices fall,<br />

consumer<br />

inflation slows<br />

on soft demand<br />

China’s factory-gate prices showed<br />

an annual fall for a second month in<br />

November, while consumer inflation<br />

slowed, indicating weak activity and soft<br />

demand in an economy that has been held<br />

back by tough pandemic controls.<br />

Analysts said they expected the<br />

government to keep interest rates low and<br />

take measures to boost confidence.<br />

The producer price index (PPI) was down<br />

1.3% from a year earlier, unchanged from<br />

an annual contraction seen in October,<br />

according to National Bureau of Statistics<br />

(NBS) data issued. That was slower than a<br />

1.4% fall tipped in a Reuters poll.<br />

The November consumer price index (CPI)<br />

rose at its slowest pace in eight months,<br />

climbing 1.6% from a year earlier, which<br />

was less than the 2.1% annual rise seen in<br />

October but in line with a Reuters poll.<br />

“These data suggest the economic<br />

momentum (continues) to weaken,” said<br />

Zhiwei Zhang, chief economist at Pinpoint<br />

Asset Management.<br />

A high-level political meeting, a gathering<br />

of the ruling Communist Party’s Politburo,<br />

emphasized that in <strong>2023</strong> the government<br />

would focus on stabilizing growth,<br />

promoting domestic demand and opening<br />

up to the outside world.<br />

Zhang said that, although the government<br />

had eased pandemic controls, it would take<br />

further measures to spur the economy.<br />

“The Politburo meeting ... identified<br />

weak confidence as a major problem<br />

for the economy,” he said. “I expect the<br />

government will do more to boost market<br />

and household confidence. The fast pace<br />

of reopening indicates the government’s<br />

sense of urgency.”<br />

Growth in the world’s second-largest<br />

economy has sagged this year, largely<br />

impacted by the uncompromising<br />

COVID-19 curbs as global demand has also<br />

wavered.<br />

The producer price deflation and milder<br />

consumer price inflation of November<br />

accompanied record COVID-19 infections<br />

and related curbs that disrupted<br />

production and curbed mobility.<br />

Although markets have cheered the shift<br />

in pandemic policy, economists say it will<br />

likely depress growth over as infections<br />

surge, bringing an economic rebound only<br />

later in <strong>2023</strong>.<br />

Producer deflation was led by the steel<br />

industry, in which prices were down 18.7%.<br />

Part of the explanation for slower growth in<br />

consumer prices was in food markets.<br />

Food prices were up 3.7% with a rise<br />

of 7.0% seen in October. Within the<br />

food category, pork was a factor behind<br />

moderating inflation: it was 34.4% more<br />

expensive in November than in the same<br />

month year ago, while in October the<br />

annual rise had been 51.8%.<br />

Underlying core annual inflation, which<br />

excludes volatile food and energy prices<br />

its figure was just 0.6% in November,<br />

unchanged from October.<br />

“The overall inflation pressure remains<br />

benign in China, and we expect the<br />

CPI inflation will be around 1.6% for<br />

<strong>2023</strong>, down from 2.0% in 2022. Given<br />

this, the monetary policy will remain<br />

accommodative over the coming year,” said<br />

Hao Zhou, chief economist at Guotai Junan<br />

Group.<br />

China’s central bank has kept its benchmark<br />

one-year loan prime rate at 3.65% since<br />

August. It expects consumer inflation to<br />

remain moderate.<br />

<strong>January</strong> <strong>2023</strong> 66

Positive effects<br />

of low rates<br />

policy to be<br />

felt more soon:<br />

Erdoğan<br />

President Recep Tayyip Erdoğan said<br />

Türkiye would start to see a stronger<br />

positive effect of the government’s<br />

economic policy prioritizing low interest<br />

rates on inflation soon, as he reiterated the<br />

government’s aim to address the soaring<br />

cost of living.<br />

The government has endorsed low interest<br />

rates to boost exports, production,<br />

investment and produce<br />

new jobs as part of an economic program,<br />

eventually aimed at lowering inflation<br />

by flipping the country’s chronic current<br />

account deficit to a surplus.<br />

“We will feel the positive effects of our<br />

low interest rate policy, which prioritizes<br />

production, employment and exports, on<br />

inflation more soon,” Erdoğan told an event<br />

in Istanbul.<br />

To counter the expected economic<br />

slowdown in the second half of this<br />

year, Türkiye’s central bank embarked<br />

on an easing cycle between August and<br />

November, slashing its policy rate by 500<br />

basis points to 9%.<br />

Price increases in Türkiye moderated in<br />

November, according to official data,<br />

signaling that inflation pressures that have<br />

been plaguing consumers for about a year<br />

and a half might be finally easing.<br />

Annual inflation dropped below 85% after<br />

touching a 24-year high in October. It is<br />

expected to decline sharply as a result of<br />

the base effect at the end of the year and<br />

falling energy prices globally.<br />

“We are solving the issue of the cost<br />

of living, which is the biggest source of<br />

distress in the whole world, including<br />

Europe and America, step by step,” Erdoğan<br />

said. Treasury and Finance Minister<br />

Nureddin Nebati said the decline in<br />

inflation will be seen due to the base effect<br />

that will last until the end of May, stressing<br />

that negative rates may be observed in<br />

food along with summer.<br />

“The citizen does not look at the ‘base<br />

effect’ in inflation, but at his pocket. We<br />

will see a mathematical decline, but there<br />

will also be a decline that will be felt,”<br />

Nebati told the Turkish business daily Nasıl<br />

bir Ekonomi.<br />

<strong>January</strong> <strong>2023</strong> 68

Lira not far from ‘optimal point’<br />

Nebati also addressed the recent remarks<br />

by exporters who complained that the<br />

Turkish lira was becoming increasingly<br />

overvalued and that foreign exchange rates<br />

should be directly proportional to inflation<br />

levels.<br />

The lira’s current level is not “too far<br />

away from the optimal point” and further<br />

depreciation could fuel consumer inflation,<br />

he said.<br />

“(Exporters) should not complain in vain<br />

about the exchange rate ... The increase<br />

in the foreign exchange will disrupt our<br />

inflation plan,” the minister noted.<br />

Turkish Exporters Assembly (TIM) chair<br />

Mustafa Gültepe said the stability in the<br />

lira, despite soaring inflation, is hurting<br />

exporters’ competitiveness and some<br />

risk losing markets. However, he did not<br />

propose a specific lira level.<br />

Authorities have employed a battery of<br />

regulations to tightly control the exchange<br />

rate in the wake of a deep slide in the lira<br />

in late 2021, a year in which the Turkish<br />

currency lost 44% to the U.S. dollar. The<br />

currency dropped another 29% this year,<br />

but has stabilized since the summer<br />

and held steady near TL 18.6 since early<br />

October.<br />

The earlier lira depreciation gave exporters<br />

of Turkish textiles, white goods and<br />

automobiles a big competitive edge<br />

globally. But since the central bank and<br />

government employed its reservesmanagement<br />

system, those benefits began<br />

to erode.<br />

“2022 will go down in history as the worst<br />

year. There is a foreign trade deficit of $100<br />

billion and a current account deficit of $50<br />

billion, but we are leaving this difficult<br />

period behind,” Nebati said.<br />

One of the main drivers of Türkiye’s<br />

economic growth this year, exports hit<br />

record-high volumes throughout the<br />

first 11 months of this year. Yet, a global<br />

slowdown has put a drag on foreign<br />

demand, notably among Türkiye’s largest<br />

trade partners, spearheaded by Europe.<br />

Outbound shipments from <strong>January</strong> through<br />

November jumped 14% from a year ago to<br />

$231 billion, while imports were up 36.6%<br />

to nearly $331.1 billion, driven mainly by<br />

steep rises in energy and commodity prices<br />

after Russia’s invasion of Ukraine.<br />

Separate data showed Türkiye posted the<br />

smallest current account deficit in a year,<br />

driven by robust tourism revenues.<br />

The shortfall in the current account, the<br />

broadest measure of trade and investment,<br />

came in at $359 million in October,<br />

according to data from the central bank.<br />

The figure came in versus a revised $2.88<br />

billion deficit in September.<br />

Income from foreign tourists came in at<br />

$5.5 billion, the second-highest monthly<br />

inflow on record, according to central<br />

bank data going back nearly four decades.<br />

Official reserves rose $5.1 billion, the<br />

second biggest jump in 2022 after the<br />

$10.8 billion increase registered in August,<br />

after a Russian state company transferred<br />

funds to Türkiye for the construction of a<br />

nuclear power plant.<br />

Bank accounts set up by Russian tourists<br />

are also contributing to the current buildup<br />

in Türkiye’s foreign currency holdings,<br />

Nebati said.<br />

<strong>January</strong><br />

69 <strong>2023</strong>

Türkiye drives post-pandemic tourism<br />

recovery in Europe: Report<br />

Türkiye’s tourism sector has achieved<br />

the most significant recovery among<br />

European countries in the post-pandemic<br />

era with a 61% rise in demand compared<br />

to 2019, according to the European Travel<br />

Commission’s (ETC) November report.<br />

The ETC’s “European Tourism Trends and<br />

Prospects” report stated that Türkiye<br />

positioned itself in first place while there<br />

was a rapid recovery in tourism demand<br />

similar to that of 2019 across Europe.<br />

“Europe’s return on travel will continue<br />

through the remaining months of 2022, led<br />

by cost-conscious and value-driven travel,”<br />

the report said.<br />

“All things considered; the European<br />

continent is expected to recover to close to<br />

75% of 2019 inbound travel volumes by the<br />

end of 2022.”<br />

The report said that “travel enthusiasm<br />

persisted this summer with over half<br />

of reporting destinations recovering to<br />

at least 77% of 2019 levels of foreign<br />

arrivals,” highlighting that the rebound was<br />

led mostly by Southern Mediterranean<br />

destinations.<br />

“Based on data to August, Türkiye, Serbia<br />

and Luxembourg made the strongest<br />

comeback,” it said.<br />

“While Türkiye remains a good value<br />

destination, Serbia is open to Russian<br />

travelers without visa requirements.<br />

Indeed, there has been an influx of<br />

Russians arriving in Serbia,” it added.<br />

The sharpest declines in tourist arrivals,<br />

the report said, were recorded in the Baltic<br />

states, Finland, Romania and Slovakia.<br />

Currently, the Baltic states have a warrelated<br />

ban on Russian travel while Slovakia<br />

has suspended tourist visa applications for<br />

Russians.<br />

Türkiye’s tourism revenues kept on the<br />

path of growth throughout the year.<br />

In the first 10 months of the year, the<br />

number of foreign visitors climbed 88.1%<br />

to 39.61 million, on pace to roughly match<br />

the pre-pandemic levels of 2019, according<br />

to the latest data.<br />

The 10-month figure stood at 21.1 million<br />

in 2021, 11.2 million in 2020 and 40.7<br />

million in 2019, the Culture and Tourism<br />

Ministry said recently.<br />

In addition to the influx from Russia, the<br />

rebound this year has been driven by<br />

a major leap in demand from Europe,<br />

spearheaded by Germany and the United<br />

Kingdom.<br />

Istanbul, Türkiye’s most famous province<br />

and the largest one by population, was the<br />

top draw for foreign visitors, welcoming<br />

13.4 million tourists from <strong>January</strong> through<br />

October this year.<br />

It was followed by the Mediterranean<br />

resort city of Antalya with 12.2 million<br />

visitors, while Edirne, a northwestern<br />

province bordering Bulgaria and Greece,<br />

welcomed nearly 4 million tourists, the<br />

data showed.<br />

Germans made up 13.3% of all visitors<br />

in the 10-month period with 5.3 million,<br />

followed by Russians with 4.6 million,<br />

Britons 3.2 million, Bulgarians 2.3 million<br />

and Iranians with 2 million.<br />

If Turkish citizens living abroad are added<br />

to the count, the 10-month figure reaches<br />

45 million.<br />

The ETC report, meanwhile, further showed<br />

that the <strong>January</strong>-September data relative<br />

to 2021 features a strong performance in<br />

the European hotel industry compared to<br />

other regions.<br />

“Driven by strong occupancy rates, up 62%<br />

over prior-year levels and a 30.1% rise in<br />

ADR (average daily rate) alongside surging<br />

travel demand, Europe recorded a 111%<br />

increase in RevPAR (Revenue Per Available<br />

Room),” it said.<br />

It said European airlines held up well this<br />

summer with August flight volumes down<br />

just 11% relative to 2019.<br />

<strong>January</strong> <strong>2023</strong> 72

Tourism revenue<br />

target revised<br />

to $46 billion:<br />

Minister<br />

Türkiye has revised its targets upwards for<br />

tourist arrivals and tourism revenue for<br />

2022 to 51.5 million and to $46 billion,<br />

Culture and Tourism Minister Mehmet Nuri<br />

Ersoy has announced.<br />

Some 60 million visitors and $56 billion<br />

in tourism revenues are expected, Ersoy<br />

said, speaking at the parliament where he<br />

presented his ministry’s budget for <strong>2023</strong>.<br />

“All those numbers point to the fact that<br />

Türkiye is now in the super league in the<br />

global tourism industry. Our competitors<br />

are the top countries [in tourism]. We are<br />

moving toward meeting our targets,” Ersoy<br />

said.<br />

Türkiye at the start of 2022 set tourist<br />

arrival and tourism revenue targets at 42<br />

million and $35 billion. In the face of the<br />

rebound in tourism activity, those targets<br />

were revised upwards first in July to 47<br />

million and $37 billion. In October, Ersoy<br />

announced another revision for the 2022<br />

targets to 50 million tourist arrivals and $44<br />

billion in tourism revenues.<br />

In the <strong>January</strong>-October period, 39.6 million<br />

foreign tourists visited Türkiye, marking an<br />

88 percent increase from the same period<br />

of 2021. Including Turkish citizens residing<br />

abroad, tourist arrivals exceeded 45 million<br />

people.<br />

In the third quarter of 2022, tourism<br />

revenues rose by 27 percent year-on-year<br />

to $17.95 billion. In the first nine months<br />

of the year, tourism revenues amounted to<br />

$35 billion, exhibiting a 68 percent increase<br />

from a year ago.<br />

Türkiye successfully managed the crisis<br />

in the global tourism industry, which was<br />

triggered by the COVID-19 pandemic,<br />

engaging in very effective campaigns<br />

abroad to promote the country, Ersoy said.<br />

Under the “Safe Tourism Program,” more<br />

than 12,000 facilities and vehicles received<br />

a certificate as of June, according to the<br />

minister.<br />

“Presently, we are carrying out special<br />

promotion campaigns through digital and<br />

conventional means of communication in<br />

200 countries.”<br />

Ersoy also noted that Türkiye signed a<br />

three-year cooperation agreement with<br />

the Global Sustainable Tourism Council and<br />

prepared a “Türkiye Sustainable Tourism<br />

Program.”<br />

This program sets out sustainability<br />

criteria for accommodation facilities, the<br />

minister explained. Under the sustainability<br />

program, which covers the years <strong>2023</strong>,<br />

2025 and 2030, all accommodation<br />

facilities will gradually become<br />

environment friendly, Ersoy said.<br />

The government provided a total of 2.3<br />

billion Turkish Liras in financial support<br />

between 2002 and 2022 to improve<br />

infrastructure and as part of sustainability<br />

efforts, according to Ersoy.<br />

<strong>January</strong> <strong>2023</strong> 74

M&A volume hits<br />

$11 billion<br />

The volume of merger and acquisition (M&A) deals in Türkiye<br />

increased in 2022 to stand at $11 billion, according to a report<br />

by Deloitte.<br />

The M&A volume in 2022 was below the last 10-year average<br />

but still rose by 8 percent this year from 2021, the report noted.<br />

The top 10 deals accounted for around 50 percent of the total<br />

M&A volume this year. Some 295 with a deal value of less than<br />

$10 million made up for 73 percent of all M&As, while those<br />

deals’ share in total was only 4 percent.<br />

The largest deal was the Türkiye Wealth Fund’s (TVF) purchasing<br />

of shares in Türk Telekom. This deal alone accounted for 15<br />

percent of all M&A volume in 2022, according to the report.<br />

TVF announced in March this year that it signed a share<br />

purchase agreement to acquire 55 percent of shares of the<br />

telecom giant. Following the deal, TVF became the majority<br />

shareholder of Türk Telekom with a 61.68 percent stake.<br />

The size of the average deal was $27 million, similar to the<br />

same levels seen in the past years, the reports said.<br />

At a time when the global M&A volume contracted, the<br />

transactions in Türkiye gained momentum, said Özlem Ulaş<br />

from Deloitte Türkiye.<br />

“Foreign investors accounted for half of all deals, but foreign<br />

investor deal volume declined,” she added.<br />

War, energy security and global inflationary pressures are the<br />

new challenges and risks, Ulaş said.<br />

“Despite all those challenges in the investment environment,<br />

the M&A activities remained robust,” she added.<br />

<strong>January</strong> <strong>2023</strong> 75

Türkiye to invest<br />

$21.6 bln in the<br />

maritime sector<br />

by 2053<br />

Türkiye will invest $21.6 billion more in its<br />

maritime sector by 2053, Transport and<br />

Infrastructure Minister Adil Karaismailoğlu<br />

has said.<br />

Those investments will contribute around<br />

$180 billion to the Turkish economy, the<br />

minister added.<br />

“Our contribution to production will<br />

be $300 billion, while adding 5 million<br />

jobs over the next 30 years,” said<br />

Karaismailoğlu, recalling that total<br />

investments in the country’s infrastructure<br />

and communications will amount to $198<br />

billion in the next three decades.<br />

Some 93 percent of imported goods and<br />

81 percent of exports in Türkiye were<br />

transported by ships in 2021, the minister<br />

said, noting that the Turkish fleet ranks<br />

15th in the world with a total of 31.3<br />

million deadweight tonnage.<br />

“We are expecting the deadweight tonnage<br />

to increase to 36 million at the end of the<br />

year, which will help Türkiye climb up in the<br />

ranking to the 14th spot.”<br />

The number of shipyards in the country<br />

increased from 37 in 2022 to 84, while the<br />

number of ports rose from 149 to 217,<br />

Karaismailoğlu said.<br />

Despite the challenges from the pandemic,<br />

the Turkish maritime sector continued to<br />

grow in 2020 and 2021, according to the<br />

minister.<br />

“While global container handling and total<br />

cargo handling contracted 1.2 percent and<br />

3.8 percent, the number of containers<br />

handled at the Turkish ports increased by<br />

8.3 percent from a year ago to 12.6 million<br />

TE. Total cargo handled also grew 6 percent<br />

to 526 million tons.”<br />

From <strong>January</strong> to October, cargo handling at<br />

the Turkish ports increased by 5 percent on<br />

an annual basis and total cargo handling is<br />

expected to reach 545 million tons at the<br />

end of this year, Karaismailoğlu said.<br />

<strong>January</strong> <strong>2023</strong> 76

Turkish Airlines wins best design award in Europe<br />

National flag carrier Turkish Airlines has<br />

been honored as Europe’s best-designed<br />

airline for 2022, it announced.<br />

TheDesignAir awards selected the carrier<br />

as the “Design Airline of the Year” for<br />

its touch points such as lounge, check-in<br />

islands, ticket offices and in-flight design<br />

and products.<br />

Ahmet Olmuştur, the carrier’s chief<br />

marketing officer, said: “From the entrance<br />

to the check-in counters and lounges at<br />

Istanbul Airport, and to the new cabin and<br />

seat designs on board, we meticulously<br />

inject our Turkish Airlines brand identity at<br />

every touch point.<br />

“With our traditional hospitality, we strive<br />

to make our passengers’ experience<br />

privileged by providing service beyond<br />

their expectations.”<br />

“Turkish has continued to excel at<br />

passenger experience, brand and customer<br />

service, and where some carriers have<br />

been cutting back, Turkish has continued<br />

to invest in enhancements both on the<br />

ground and in the skies,” said TheDesignAir.<br />

“The use of a consistent brand image, color<br />

palette and design language throughout<br />

the digital and physical experiences has<br />

helped produce a powerful airline brand<br />

that continues to impress against its<br />

European counterparts. Turkish Airlines has<br />

once again this year reaffirmed its position<br />

as a leading design airline of the world,<br />

taking the crown for the European region<br />

once more.”<br />

Founded in 1933 with a fleet of five aircraft,<br />

Turkish Airlines now flies to 342 points in<br />

129 countries with a fleet of 395 aircraft.<br />

Erdoğan, Gazprom chief discuss Turkish gas hub project<br />

President Recep Tayyip Erdoğan and Alexei Miller, the head of<br />

Russian energy giant Gazprom, discussed the project to make<br />

Türkiye a gas hub and Russian gas supplies, in a meeting held in<br />

Istanbul.<br />

Putin first proposed producing a gas base in Türkiye in October<br />

as a means to redirect supplies from the damaged Nord Stream<br />

pipelines and export them on to the European market, an idea that<br />

Erdoğan has supported.<br />

Putin has repeatedly said that a natural gas hub could be set up in<br />

Türkiye fairly quickly, forecasting many European customers would<br />

emerge in such a marketplace.<br />

Erdoğan previously said Russian and Turkish energy authorities<br />

would work together to designate the best location for the<br />

potential gas distribution center, adding that Türkiye’s Thrace<br />

region, bordering Greece and Bulgaria, appeared to be the best<br />

spot. Türkiye is home to seven international natural gas pipelines<br />

and one of the ways Russian gas reaches Europe is through the dual<br />

TurkStream natural gas pipeline. With a total capacity of 31.5 billion<br />

cubic meters (bcm), each line has an annual capacity of 15.75 bcm.<br />

The European Union, which previously turned to Russia for about<br />

40% of its gas needs, is seeking to wean itself off Russian energy<br />

following Moscow’s invasion of Ukraine.<br />

<strong>January</strong> <strong>2023</strong> 78

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