Automotive Expotrs January 2023

1

Monthly automotive aftermarket magazine
GROUP CHAIRMAN
H. FERRUH ISIK
PUBLISHER:
İstmag Magazin Gazetecilik
İç ve Dış Ticaret Ltd. Şti.
Managing Editor (Responsible)
Mehmet Söztutan
mehmet.soztutan@img.com.tr
Advertising Managers
Adem Saçın
+90 505 577 36 42
adem.sacin@img.com.tr
EDİToR
Mehmet Soztutan, Editor-in-Chief
mehmet.soztutan@img.com.tr
Enes Karadayı
enes.karadayi@img.com.tr
International Marketing Coordinator
Ayca Sarioglu
ayca.sarioglu@img.com.tr
Editor
Yusuf Okçu
yusuf.okcu@img.com.tr
Finance Manager
Cuma Karaman
cuma.karaman@img.com.tr
Digital Assets Manager
Emre Yener
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Technical Manager
Tayfun Aydın
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Design & Graphics
Sami aktaş
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Accountant
Yusuf Demirkazık
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Subsciption
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Dynamism prevails…
We know that competitiveness at the domestic level has been replaced with
competitiveness on a global scale, when it comes to automotive industry. The Turkish
automotive industry, which was originally founded for import-substitution purposes and
focused on the domestic market for a long period, transformed itself into a production
base for a number of global models.
In motor vehicles, a large number of EU legislation was adopted. Türkiye has been
continuing efforts to introduce the relevant legal arrangements, and significant progress
has been achieved in this field.
Meanwhile, Türkiye’s first domestically produced electric vehicle brand, Togg will have a
competitive price tag compared to its peers and even cars with combustion engines, once
it hits the roads in the first months of 2023.
The Turkish automotive industry is one of the four largest exporting and leading investor
industries of the Turkish economy. It is an economically strategic sector in terms of its
significant contribution to the national production and development, direct and indirect
employment and level of technology in Türkiye. The automotive parts industry is strong
and competitive. It has developed in parallel with the development of Türkiye's automotive
industry both in quality and production volumes.
Following the shift of the focus on customers, markets, products and competition from
the local level to the global level, Turkish automotive manufacturers and suppliers position
themselves globally rather than locally.
This transformation in the sector urges automotive suppliers to improve their existing
structures in line with the demands of global auto manufacturers.
Turkish producers of parts and components have attained high standards reflected by
large export volumes to the Western countries.
The Turkish automotive parts and components industry has now developed to the stage
where it is at a level ready to take advantage of the globalization and structural changes in
the world automotive industry. A number of firms active in the industry have been named
the "co-designer" in the global vehicles manufactured in Türkiye.
Our publications, by participating in major international fairs and exhibitions, remain at
the service of those businesses people seeking to increase their share in the increasingly
competitive foreign markets.
We are convinced that these events would be instrumental to increase business
opportunities in the automotive industry.
We wish lucrative trade for all participants.
automotiveexport
automotiveexports

Vehicle sales
may hit 120,000
Total vehicle sales may climb to 120,000 in
December, surpassing the 110,000 mark for
the first time in five years, according to an
executive from carmaker Fiat.
Potential consumers are heading to dealers
to buy new cars before the end of the year
after the government announced the new
price thresholds for a special consumption
tax (SCT) on vehicles.
However, the problem in the market is
the insufficient supply of cars, while some
potential buyers are facing difficulties
obtaining loans for purchasing vehicles in
high segments.Despite those problems, the
combined sales of passenger cars and light
commercial vehicles are expected to climb
to 120,000 in December.
“Demand is strong. Depending on the
availability of vehicles, sales could reach
120,000 vehicles this month,” said Altan
Aytaç, the brand director at Fiat.
After the SCT issue became clear, demand
in the market picked up, he told reporters
at an event in Istanbul, which was
organized to introduce Fiat’s two new light
commercial vehicle models.
“We are expecting sales to be around
110,000 or even 120,000 vehicles in
December. For the whole year, we forecast
780,000 sales,” Aytaç said.
For his company, Aytaç projected that Fiat
will sell 124,000 vehicles this year and that
its market share will be 18.6 percent.
The latest data from the Automotive
Distributors’ and Mobility Association
(ODMD) showed that the combined sales
of passenger cars and light commercial
vehicles increased 37 percent year-on-year
in November to 82,311.
January 2023 10

Automotive exports rise to $2.9 billion
Turkish carmakers increased their exports
by 13.7 percent in November from a
year ago to $2.87 billion, data from the
Uludağ Automotive Industry Exporters’
Association (OİB) have shown.
The share of the automotive industry in
Türkiye’s overall export revenues was 13.2
percent.
The country’s exports stood at $21.85
billion, rising 1.9 percent from a year ago.
The supply sector’s exports amounted to
$1.15 billion, rising 12 percent compared
with November 2021, while passenger
car exports increased by 2 percent on an
annual basis to $847 million. The sales
of bus, minibus and midibus to foreign
markets recorded a 33 percent increase
from a year ago to $207 million.
Despite the 2 percent decline in exports
to $387 million, Germany was still the
largest market for local carmakers. Sales
for France grew 2 percent to $296 million,
while exports to Italy, the third largest
market, soared 49 percent year-on-year to
$270 million.
Exports to the U.K, the U.S., and Russia,
other major markets for the Turkish
automotive industry, grew by 10 percent,
28 percent and 39.5 percent, respectively.
From January to November, automotive
exports grew by 5.6 percent from the
same period of 2021, amounting to $27.8
billion. The average monthly export
revenue of the industry was $2.54 billion.
Türkiye’s export revenues increased by
13.9 percent in the first eleven months
of 2022 from a year ago to stand at $231
billion.
The $2.87 billion exports recorded in
November was the highest figure this
year, said Baran Çelik, the board chair of
OİB, adding that the automotive industry
managed to increase its exports despite
the slowdown and recession risks in the
global economy.
January 2023 12

Automechanika Dubai - A heartfelt thank
you for the overwhelming response
Nowember 2022 saw a record breaking
edition of Automechanika Dubai which
was held on 22 – 24 November 2022 at the
Dubai World Trade Centre.
43,103 visitors from 153 countries joined
1,145 exhibitors from 53 countries
along with 20 official country pavilions
to discover new opportunities, explore
innovations, engage in serious business
conversations and sign new deals.
The officials of the Fair noted:
We, at Automechanika Dubai, would
like to express our sincere and heartfelt
gratitude to our exhibitors, sponsors,
partners, speakers, visitors and the global
automotive aftermarket community for
the overwhelming response for the 2022
edition of the show.
With the tremendous positive response
that we have received, planning is already
underway for a special 20th Anniversary
Edition of Automechanika Dubai which will
be held on 15 – 17 November 2023 at the
Dubai World Trade Centre.
Automechanika Dubai Awards Celebrates
the Best in Automotive Aftermarket.
The global automotive aftermarket
industry came together on the morning
of the 23rd November to celebrate the
industry’s excellence, achievements and
innovations recognising individuals and
organisations at the Automechanika Dubai
Awards.
With the world of automotive aftermarket
gathered at Automechanika Dubai, the
exhibition saw a number of contracts and
MoUs signed onsite.
Al Shamali Auto Parts signed a
commemoration certificate marking 30
years of co-operation between them and
PT Edico in the presence of H.E. Husin
Bagis, the Ambassador of Indonesia to
the UAE; while Mineral Circles Bearings
were appointed as official distributors for
Corteco and GMB at the show. Goodyear
also announced their foray into lubricants
at Automechanika Dubai 2022.
January 2023 14

Industrial production growth
gains momentum
The pace of annual growth of industrial
production increased from 0.5 percent in
September to 2.5 percent in October, data
from the Turkish Statistical Institute (TÜİK)
have shown.
In the manufacturing sector, output
growth strengthened from 1.7 percent
to 3.7 percent, while intermediate goods
production, which fell 5 percent in
September, declined again by 5 percent
year-on-year in October.
The annual increase in the durable
consumer goods manufacturing sector
picked up from 0.4 percent from 5.5
percent, but non-durable consumer goods
production grew 2.9 percent year-on-year,
easing from the previous month’s 7.1
percent.
The energy sector’s production contracted
3.6 percent in October from a year earlier,
after falling 1.4 percent in September.
The year-on-year production growth in
the capital goods sector leaped from 7.2
percent in September to 26.6 percent.
The mining and quarrying industry’s output
was down 7.4 percent, which came on
top of the 16.5 percent contraction in the
sector’s production in the previous month.
On a seasonally and calendar-adjusted
basis, Türkiye’s industrial production
increased by 2.4 percent in October from
September, when output contracted 1.6
percent month-on-month. Retail sales
January 2023 18

volume TÜİK also reported on Dec. 13
that the retail sales volume index climbed
9.5 percent in October compared with
the same month of 2021.
Food, beverages and tobacco product
sales increased by 10.8 percent on an
annual basis, while non-food retail sales
exhibited a yearly rise of 11.8 percent
and automotive fuel sales were up 1.1
percent.
Electronic goods and furniture sales rose
by 11.4 percent and computer, books and
telecommunications equipment sales
increased by 30.5 percent year-on-year.
Retail sales via mail and the internet
grew 26.5 percent, while overall retail
sales increased by 1.4 percent in October
from September.
Separate data from TÜİK showed that the
combined turnover in the construction,
industry, trade and services sectors
exhibited an annual increase of 124.8
percent in October, after rising 135
percent in the previous month. In the
industry sector, the annual increase in
turnover was 121 percent, while it was
114 percent in construction.
In the trade and services sectors,
turnover grew by 126 percent and 155
percent, respectively.
The combined revenues of those four
industries increased by 3.9 percent in
October from September.
January
19 2023

Equipmake unveils
high-power-dense
e-axle for makers
of performance EV
Leading automotive electrification
specialist Equipmake launched the
Ampere-220 e-axle: a compact, lightweight,
high-power electric drive system for
manufacturers of high-performance
electric vehicles.
Debuted at LCV-Cenex, it combines one
of the most advanced 3D-printed electric
motors in the world with all power
electronics, including the company’s own
silicon carbide inverter, and an integrated
transmission system in a compact unit that
directly powers the vehicle’s axle, bringing
a step change in off-the-shelf performance
for electric sports cars and supercars.
At its heart, the e-axle features the Ampere
electric motor, which draws on both
Equipmake’s world-leading expertise in
electric motors - featuring a spoke rotor
design which has recently also featured
in the Ariel HIPERCAR in the form of
Equipmake’s APM motor - and pioneering
knowledge in additive manufacturing and
thermal engineering from Bristol-based
HiETA.
Extremely lightweight yet efficient and
cost-effective, Ampere has peak power
of 220kW and a maximum motor speed
of 30,000rpm. Weighing just under 20kg,
it offers power density of 11kW per kg –
more than twice that of a conventional
electric motor. The key to its performance
is its combination of Equipmake’s spoke
design with additive manufacturing,
allowing Ampere’s metal structure to
be 3D-printed, rather than milled from
a solid billet. Bringing many advantages,
firstly, metal is only put where it is
needed. Secondly, thermally efficient thin
walls and optimised fine surface details
are combined directly with the motor’s
structure, replacing multi-part assemblies
with a single, complex architecture that has
exceptional cooling ability, is lightweight,
has low inertia and allows for greatly
increased rotational speed.
Making its debut in the Ampere-220 e-axle,
the advanced electric motor is combined
with all necessary power electronics,
including Equipmake’s high-performance
silicon carbide-based inverter, and an
integrated transmission system too,
resulting in a
state-of-the-art, highly compact and
lightweight electric drive system that
is ready to be integrated into a highperformance
electric vehicle.
Debuted in twin-motor specification,
Ampere-220 e-axle offers 440kW peak
power per axle with a total unit weight of
just 85kg. Equipmake can also develop a
single-motor
e-axle application with 220kW of peak
power per axle. The Ampere-220 e-axle is
designed, engineered, and manufactured
at Equipmake’s headquarters in Snetterton,
Norfolk, where the company provides the
complete electric vehicle solution, offering
everything from motors to fully electrified
platforms, supporting primarily the
automotive and aerospace sectors.
Ian Foley, Equipmake CEO, said:
“Equipmake has always been at the
forefront of innovation in electric motors,
with our APM range offering class-leading
power densities thanks to their compact,
lightweight designs. Ampere showcases
the next leap, and combined with our own
power electronics, including our silicon
carbide inverter, and transmission system,
we have created the Ampere-220 e-axle.
With such a huge amount of performance
in a compact, lightweight electric drive
unit, one that is also ISO 26262-compliant
and ASIL-D ready, Ampere-220 e-axle
provides the total off-the-shelf highperformance
electric solution for
manufacturers of electric sports cars
and supercars. It further underlines
Equipmake’s position as a leading provider
of state-of-the-art electrification systems to
the automotive industry.”
January 2023 22

MÜSİAD Expo brought together hundreds of
companies, businesspeople from across globe
Nov. 2-5, including ambassadors from
Developing Eight (D-8) countries – Türkiye,
Bangladesh, Egypt, Indonesia, Iran,
Malaysia, Nigeria, and Pakistan, he added.
Asmali said the expo makes a tangible
impact on international trade, citing the
fact that 17 institutions from 11 countries
signed cooperation agreements.
One of the agreements was signed with
D-8 Secretary General Isiaka Abdulkadir
Imam, under which MUSIAD will enhance
ties with the D-8 and make our cooperation
more comprehensive, he added.
“The participation of Turkish President
Recep Tayyip Erdogan, Parliament Speaker
Mustafa Sentop, Turkish ministers, Turkic
Republic of Northern Cyprus Prime
Minister Unal Ustel among other senior
ministers and representatives of foreign
countries is a testament to the importance
of the expo,” Asmali noted.
During the event, MUSIAD unveiled
two new bodies – MUSIAD Invest and
MUSIAD Trade Office – to further bolster
its international reach and operations, he
added.
The Independent Industrialists’ and
Businessmen’s Association (MUSIAD) Expo
“has turned into a commercial diplomacy
event,” the organization’s head Mahmut
Asmali said.
Some 600 companies from around the
world participated in the 19th MUSIAD
Expo organized in Istanbul, with visitors
coming from countries including Algeria,
Saudi Arabia, Germany, Iraq, Pakistan,
Russia, Egypt, Indonesia, Jordan, Austria,
and Morocco, Asmali said in a statement.
Top officials from several countries also
attended the four-day event held on
January 2023 24

Toyota cuts
output target
amid chip
crunch as profit
tumbles 25%
Toyota Motor Corp. posted a worse-thanexpected
25% drop in quarterly profit
and cut its annual output target, as the
Japanese firm battles surging material costs
and a persistent semiconductor shortage.
The world’s biggest automaker by sales
also warned that it remained difficult to
predict the future after posting its fourth
consecutive quarterly profit decline,
underlining the strength of business
headwinds it faces.
During the coronavirus pandemic, Toyota
fared better than most carmakers in
managing supply chains, but it fell victim
to the prolonged chip shortage this
year, cutting monthly production targets
repeatedly.
“We’re out of the worst phase, but... it’s
not necessarily a situation where we’re
fully supplied,” said Kazunari Kumakura,
Toyota’s purchasing group chief. “I don’t
know when the chip shortage will be
resolved.”
Operating profit for the three months
ended September fell to 562.7 billion yen
($3.79 billion), well short of an average
estimate of 772.2 billion yen in a poll of 12
analysts by Refinitiv. Toyota sales reported
a 749.9 billion yen profit a year earlier,
and 578.6 billion yen in profit in the first
quarter. Kumakura said the global auto chip
shortage continues, as chipmakers have
prioritized supplies for electronics goods
such as smartphones and computers, while
natural disasters, COVID-19 lockdowns and
factory disruption have slowed a recovery
in auto chip supplies.
He also said the supply of older-type
semiconductors, which attract little capital
investment currently, would remain tight.
Amid the gloom, shares in Toyota closed
down 1.9%, versus a 0.3% rise in the Nikkei
average.
‘Very unimpressive’
Some analysts were underwhelmed by the
performance, saying other positive factors
beyond the chip shortage should have
provided a boost.
“The yen is weaker in the second quarter,
the volume in the second quarter is much
higher than in the first quarter, and the
(COVID-19) lockdown in China does not
affect (the volume in the second quarter),”
said Koji Endo, an analyst at SBI Securities.
“Considering these points... the absolute
amount of profit in the second quarter
has got to be higher than that of the first
quarter. It is very unimpressive.”
Production rebounded by 30% in the
quarter, but the company warned that
shortages of semiconductors and other
components would continue to constrain
output in coming months.
Toyota said it now expects
to produce 9.2 million
vehicles this fiscal year,
down from the previously
forecast 9.7 million but still
ahead of last financial year’s
production of about 8.6
million units.
Toyota had told several
suppliers it was setting a
global target for the current
business year to 9.5 million vehicles
and signaled that the forecast could be
lowered, depending on the supply of
electromagnetic steel sheets.
Muted yen impact
The yen has plunged around 30% this
year against the U.S. dollar, but the
benefit of the cheap yen - making sales
overseas worth more - has been offset by
soaring input costs.The weak yen boosted
profit by 565 billion yen in the first half
of this financial year, but the gain was
more than wiped out by 765 billion yen
increase in material costs, with the cheap
local currency further inflating import
costs, Toyota said. Toyota retained its
conservative profit outlook, sticking to its
full-year operating forecast of 2.4 trillion
yen for the fiscal year through March 31
– well below analysts’ average forecast
of 3.0 trillion yen. By comparison, South
Korea’s Hyundai Motor raised its revenue
and profit margin guidance to reflect a
foreign exchange lift. Toyota, once a darling
of environmentalists for its hybrid gasolineelectric
models, is also under scrutiny from
green investors and activists over its slow
push into fully electric vehicles (EV).
Just a year into its $38 billion EV plan,
Toyota is already considering rebooting
it to better compete in a market growing
beyond its projections.
In a reputational hit, Toyota had to recall
earlier this year its first mass-produced
all-electric vehicle after just two months
on the market due to safety concerns, and
suspend production. It restarted taking
leasing orders for domestic market.
Toyota reiterated that battery-powered
EVs are a powerful weapon for
decarbonization, but that there are various
other options to achieve the goal.
January 2023 26

Exports in Turkish lira up
182% year-over-year
Exports in Turkish lira increased by 182% in
September compared to the same month
of the previous year, reaching TL 16.3
billion ($877.2 million), according to the
official data.
The overall exports in rose by 9.2% yearover-year,
amounted to $22.6 billion,
according to the report by Anadolu Agency
(AA) which cited data from the Trade
Ministry.
In September, foreign trade volume
increased by 26% compared to the same
period of 2021 and reached $55.6 billion,
while imports reached $33 billion due to
the increase in energy and commodity
prices.
While exports in Turkish lira were TL 7.2
billion in January, imports were TL $12.1
billion and the foreign trade volume
increased to TL 19.1 billion.
In this category, exports were TL 8.5
billion, imports were TL 13.5 billion, and
foreign trade volume was TL 22.9 billion in
February. In March, the said exports were
calculated as TL 9.2 billion, imports were TL
17.1 billion, and the foreign trade volume
was TL 26.4 billion.
In April, exports in Turkish lira reached TL
8.4 billion, imports reached TL 17.5 billion,
and foreign trade volume reached TL 26.1
billion. In May, this export amounted to TL
7.4 billion, imports amounted to TL 19.9
billion, and the trade volume was TL 26.5
billion.
Exports in Turkish lira reached TL 9.9
billion in June, while imports reached
TL 22.2 billion. Foreign trade volume
was calculated as TL 32.2 billion in the
said month. The aforementioned export
amount was recorded as TL 7.9 billion,
imports as TL 18.5 billion and foreign trade
volume as TL 26.5 billion in July.
Exports in Turkish lira were TL 10.3 billion
in August, and imports were TL 23.8 billion.
Foreign trade volume was determined as TL
34.1 billion in August.
In the January-September period of this
year, the export made in the national
currency increased by 89% compared to
the same period of the previous year and
reached TL 85.2 billion. In this period,
imports in Turkish lira were recorded as TL
172.2 billion and foreign trade volume was
recorded as TL 257.2 billion.
In September, the number of countries to
which exports were made in the national
currency was 170 and the number of
exporting companies was 6,907. In August,
the number of countries was 164 and the
number of exporting companies was 6,439.
January 2023 28

$250B export target reachable despite global headwinds
Türkiye is aiming for $250 billion (TL 4.55
trillion) in exports this year, Trade Minister
Mehmet Muş said, stressing that the
country maintains the goal despite signs
of a global slowdown and inflationary
pressures.
Muş was speaking at the 4th Türkiye
Export Mobilization summit. The event
was organized by Türkiye’s leading media
group and Daily Sabah’s parent company,
Turkuvaz Media, in the southeastern
province of Gaziantep.
The minister separately wrote on Twitter
that exports in August hit an all-time
monthly high yet again, reaffirming the
views that the annual target would be
achieved even before the year-end.
Foreign sales jumped 13.1% year-over-year
to $21.3 billion, Muş said. Imports rose at a
much faster pace, jumping 40.7% to $32.6
billion Exporters have managed to achieve
record sales in each month so far this year
and in 22 of the last 24 months.
The trade deficit surged by 162% to a
record $11.3 billion in August, data from
the Turkish Exporters Assembly (TIM)
showed. The shortfall in the first eight
months jumped by 146.4% to $73.4 billion,
mainly due to rising energy import costs.
Deteriorating global conditions,
exacerbated by the war in Ukraine, have
raised concerns for the rest of the year.
Russia’s invasion of its neighbor has
sent global commodity prices soaring,
endangering Türkiye’s economic program
that aims to tackle high inflation with a
current account surplus.
Exports had ended 2021 at $225.4 billion,
a figure that government and economists
expected to reach $250 billion this year.
Muş said that they want to diversify the
regions that Turkish businesses export to,
focusing on North and South America and
East Asia, not just Europe.
More than half of Türkiye’s export is
destined for Europe, he said, however,
the uncertainty in the region produces
obstacles.
“Compared to the 2021 period, our exports
to this region increased by 17.2% in the
January-August period,” the minister said,
but this increase “is in a moderate trend
compared to months.”
“The uncertainty and slowdown in Europe
weaken demand. For example, while our
exports to the EU increased by 17.8% in
June compared to the previous year, the
increase was 5.2% in July and 2.7% in
August.”
“We are trying to diversify the market. We
want to focus not only on Europe but also
on North America, then on Latin America,
some countries in the Far East. This will
take some time, and expectations such as
the slowdown in the world, the uncertainty
in Europe and whether there will be a
power cut or not inevitably pull down
demand.”
“The slowing demand there is pushing
down our exports here,” he said.
January 2023 30

Four trends
shaping the
motor
Euromonitor International examines how
automotive industry performs globally
and in the largest countries in terms
of automotive output. The report also
provides data for production, market
size, imports, exports, industry’s costs,
industry’s profitability and number of
companies. The industry and market
overview provide benchmarks against
other countries in the region.
Electrification
Stricter emission standards and the
technological limitations of internal
combustion engines will drive investments
in electric and hybrid vehicle production.
Manufacturers will have to unlock more
resources for investments and strengthen
battery supply.
Connected vehicles
Changing consumer preferences and
stricter vehicle safety regulations will
require more investments in connected
vehicle technologies. This will gradually
change the supply chain, with electronics
and technology providers gaining greater
share. At the same time, connected
vehicles can help to open up new business
models and revenue streams for car
manufacturers.
Supply chain localization
The COVID-19 pandemic had severe effects
on the automotive industry’s global supply
chains. To better shield from similar risks
in the future, manufacturers are planning
to increase supply chain localization. This
would produce regional production hubs
and could benefit Eastern Europe and Latin
America thanks to lower operating costs
and geographic proximity to the largest
automotive markets.
Consolidation of suppliers
Rising operating costs and supply chain
changes will continue to support the
consolidation of suppliers. Suppliers will
need to collaborate as they feel pressure
from OEM and technology companies, and
at the same time must find resources to
invest in electrification programs.
January 2023 32

Inflation to ease soon as Türkiye’s economy
model yields results
Türkiye’s exports are approaching the $300
billion threshold by breaking records every
month, President Recep Tayyip Erdoğan
said as the country tries to navigate
the economic crisis with a model that
promotes growth via exports, employment,
production and a current account surplus.
The president also said that the negative
impact of inflation will begin to ease as of
the beginning of the new year thanks to
the measures taken by the government.
Erdoğan sent a video message to the
Türkiye 2023 Summit and Money Talks
organized by Turkuvaz Media Group in
Istanbul.
Expressing his hope that the summit will
be beneficial, Erdoğan congratulated the
media group on the event that saw the
participation of many respected names and
thanked all the participants who enriched
the program with their ideas, presentations
and evaluations.
Stating that the world has been going
through a painful process over the last
three years that started with the pandemic
and then grew more complicated with hot
conflicts and regional tensions, Erdoğan
said that energy, food and raw material
prices, which have reached the highest
levels in recent years, and the subsequent
inflation problem is an issue all economies
are facing.
Meanwhile, he stated that the classical
approach to reducing inflation by raising
interest rates has not met expectations
thus far, adding that many economies that
try to restrain inflation with such policies
are struggling with employment losses and
facing a cost-of-living crisis.
Under the country’s economic program,
dubbed the “Türkiye Economy Model,” the
Turkish government prioritizes low-interest
rates to boost exports, production and
investments, aiming to lower inflation and
flip the country’s chronic current account
deficits to a surplus.
In line with the model, Türkiye’s central
bank in its last meeting in November
lowered its key policy rate, or the one-week
repo rate, by 150 basis points to 9.0%.
The lender said the easing cycle that
started in August has come to an end as it
was assessed that the current policy rate is
at a sufficient level, taking into account the
increasing risks to global demand.
Price increases moderated in Türkiye in
November, recent official data showed,
signaling that inflation pressures that have
been plaguing consumers for about a year
and a half might be finally easing.
The annual consumer price index (CPI)
dipped to 84.39%, the Turkish Statistical
Institute (TurkStat) announced, ending a
17-month-long cycle of rises.
It dropped from a 24-year peak of 85.51%
in October and marked the first time that
January 2023 34

annual inflation has eased since May 2021,
when the CPI stood at 16.6%.
Emphasizing that Türkiye is one of
the countries that went through an
economically troubled period relatively
comfortably thanks to its robust
infrastructure and economic model,
Erdoğan further said, “Our industrial zones,
factories and manufacturing facilities are
working hard. Our roads and highways are
full of trucks and trucks that carry loads
from our country to Europe, Asia and the
Middle East.”
Türkiye’s exports remained buoyant and
rose 15.4% from January through October
this year to $209.5 billion, according to
official data, marking an all-time 10-month
high.
Türkiye has set a $250 billion export target
for this year, after reaching a record $225
billion in 2021.
Erdoğan also noted that Türkiye reached a
new stride by going beyond compensating
for the losses in the tourism sector,
which was hit the most by the pandemic,
highlighting that it succeeded in exceeding
the 31 million mark in employment for the
first time.
Tourism revenues are vital to Türkiye’s
economy in reaching its current account
surplus goals.
The government raised its year-end tourism
targets for the second time this year in late
October. It now expects 50 million tourists
and $44 billion in revenues, up from the 47
million tourists and $37 billion set in July
and the 45 million arrivals and $35 billion
in income it had estimated at the beginning
of the year.
Energy supply security
The president further expressed that
efforts are continuing to commission the
540 billion cubic meters (bcm) of natural
gas discovered in the Black Sea to reduce
the country’s energy dependency.
Meanwhile, Minister of Energy and Natural
Resources Fatih Dönmez, also delivering
an online speech to the event, stated that
Türkiye has the infrastructure, technical
equipment, international knowledge and
experience to produce, import, trade and
export natural gas.
“Our aim is to become a gas trade center
where reference gas prices are determined
in the region and in the world. Hopefully,
we will clarify our road map on this issue
toward the end of the year,” he said.
Noting that they are looking forward to
bringing domestic gas to the Turkish nation
in 2023 and that nine out of 10 wells have
drilled within the scope of the first phase of
the work, Dönmez said, “85% of our Filyos
Land Gas Processing Facility, which will
separate the gas from the sea, has been
completed.”
“I hope the Sakarya gas field will be the
world’s fastest offshore field development
project from exploration to first
production,” the minister said.
Dönmez also noted that the 4.6 bcm
expansion phase of the Silivri Natural Gas
Storage Facility has been completed and
“hopefully will open with the participation
of President Erdoğan.”
Apart from the investments made in
the renewables sector, Türkiye aims to
reduce its dependency on foreign energy
and external financing needs to further
ease the pressure on the current account
balance by commissioning the natural gas
discovered in the Black Sea by 2023.
January
35 2023

China launches WTO dispute over US chip sanctions
China has filed a dispute with the World
Trade Organization over U.S. restrictions on
chip exports, Beijing’s commerce ministry
said in a statement late on Dec. 12,
accusing Washington of threatening global
supply chains. The United States in October
announced new export controls aimed
at restricting China’s ability to buy and
manufacture high-end chips with military
applications, complicating Beijing’s push to
further its own semiconductor industry and
develop advanced military systems.
The moves include export restrictions on
some chips used in supercomputing as
well as stricter requirements on the sale
of semiconductor equipment. The aim is
to prevent “sensitive technologies with
military applications” from being acquired
by China’s military, intelligence and security
services, the US Commerce Department
said in October.
But China’s Ministry of Commerce on
Dec. 12 accused the United States of
“obstructing normal international trade in
products including chips and threatening
the stability of the global industrial supply
chain”, as well as violating international
trade rules and engaging in “protectionist
practices”.
The WTO dispute is intended to defend
China’s “legitimate rights and interests”,
the ministry said in its statement, urging
Washington to “give up zero-sum thinking”.
The two superpowers have long faced
off over a range of issues including
technology, trade, Hong Kong, Taiwan and
human rights. Chinese leader Xi Jinping
and US President Joe Biden pledged to
repair frayed relations at a summit in
Bali, Indonesia. Days before the latest
chip controls, the Pentagon added 13
more Chinese firms including drone
manufacturer DJI and surveillance firm
Zhejiang Dahua Technology to a blacklist of
military-linked entities.
January 2023 38

Türkiye’s Togg
aims to enter
European
market in 2024
Türkiye’s first domestically produced electric
car brand Togg aims to enter the European
market by the end of 2024, its CEO Gürcan
Karakaş said.
Speaking to the Turkish-German Economy
Forum in Germany’s capital Berlin, Karakaş
said the firm will “probably enter markets of
Scandinavian countries first.”
He added that Scandinavian countries are
more open to new brands, more open to
electric vehicles, and their infrastructure
is more widespread. He also said that the
Togg vehicle, seen in Berlin and went viral
on social media, was brought to Germany
for testing. Starting the project in 2018,
Togg began the mass production phase in
October as President Recep Tayyip Erdoğan
inaugurated the long-anticipated massive
manufacturing plant in the northwestern
province of Bursa. Togg will debut in the
market in the first quarter of 2023 with the
SUV, its first smart device in the C segment,
after the completion of homologation tests.
The brand’s CEO, who opened the
production plant doors to the group of
reporters at the end of November, said
that the price of the first model would be
announced in February, while Togg will likely
hit the roads as of the end of March.
The electric vehicle produced by a
consortium of five Turkish companies called
the Automobile Initiative Group of Türkiye,
or Togg, will produce five different models
– a SUV, sedan, C-hatchback, B-SUV and
B-MPV – until 2030 and own its intellectual
and industrial property rights.
Industry and Technology Minister Mustafa
Varank, who spoke at the “InovaTIM
Innovation Contest Award Ceremony,”
remarked on Togg’s developments, noting
that it has become the locomotive of the
system transformation, standing at the
forefront of a new industrial revolution that
began with the opening of its plant, which
stands as a first project in the “Century of
Türkiye” showcase.
“Togg, whose intellectual property rights
belong to us 100%, will activate new
technology-based initiatives. It will enable
new unicorns to emerge. It will develop the
battery and charging technologies ecosystem
in our country. It will contribute to the
development of electric motor capacity,”
he added. The car brand aims to produce 1
million vehicles by 2030, with some 30,000
units to be sold for public services through
2035, Karakaş announced earlier.
January 2023 42

Automotive production hits 1.2 million vehicles
The Turkish automotive industry’s
production increased by 6 percent in
the first 11 months from a year ago
to 1.2 million vehicles, data from the
Automotive Manufacturers’ Association
(OSD) have shown.
Local companies’ passenger car output
rose by 2 percent compared to the
January-November period of 2021 to
717,368 units, while commercial vehicle
production grew 13 percent year-on-year.
The capacity utilization rate in the
automotive industry was 68 percent,
with the capacity usage in the passenger
cars and light commercial vehicles
segment standing at 68 percent and in
the trucks segment at 90 percent.
The local automotive industry’s export
revenues increased by 5 percent yearon-year
in January-November to 876,187
vehicles. Passenger car sales to foreign
markets grew 0.4 percent, and the
increase in light commercial vehicle
exports was 12 percent from the first
11 months of 2021. Tractor exports
also exhibited an annual increase of 11
percent.
The automotive sector’s share in
Türkiye’s total exports was 12 percent in
January-November 2022, which made it
the second-largest exporting industry.
The latest data from the Uludağ
Exporters’ Assembly, the country’s
automotive sector generated $28.3
billion in export revenues in the first 11
months of 2022, rising 5 percent from a
year ago. In terms of euro, the industry’s
export grew by 19 percent to 26.9 billion
euros. Domestic vehicle sales remained
almost unchanged in the January-
November period compared to the same
period at 705,183 vehicles.
Some 505, 886 passenger cars were sold,
pointing to a 2 percent contraction in
this market, but light commercial vehicle
sales grew 6 percent on an annual basis.
The shares of domestically produced
passenger cars and light commercial
vehicles in total saVles were 38 percent
and 58 percent, respectively.
Multiple challenges occurred
simultaneously in 2022, said Cengiz
Eroldu, the president of the OSD.
As predicted initially, the automotive
industry will close the year with around
1 million vehicle exports and 1.36 million
vehicle production, he added.
“The year 2023 will be difficult to predict
because of uncertainties. There are
issues in global trade that are beyond
our control. It is necessary to produce
an environment which will unleash the
potential in the domestic market, and
to diversify the export markets and
maintain our competitiveness in the
international markets,” Eroldu said.
January 2023 44

More than a car: Togg apps prepare for ‘test drive’
Fresh from rolling out its long-anticipated
first domestically produced automobile
brand, Türkiye has been highlighting not
only the fact that it will be battery-powered
but also all the features that will make it
more than just a car.
CEO Gürcan Karakaş has been stressing
this from the start, dubbing Togg a smart
device full of mobility solutions, nextgeneration
technologies and innovation, all
of which promise to redefine the customer
experience.
Calling itself a technology brand that
blends digital and physical experiences,
Togg has joined hands with startups to
produce a new mobility ecosystem and has
been working on experience scenarios.
The vehicle is being produced by a
consortium of five Turkish companies called
the Automobile Initiative Group of Türkiye,
or Togg, in cooperation with the Union of
Chambers and Commodity Exchanges of
Türkiye (TOBB).
If we are to accept the smart, electric
autonomous moving device as the top
of the iceberg, Togg has introduced the
ecosystem that lies beneath for the first
time.
The brand has now launched one of the
most important concepts of this ecosystem
named Trumore.
The software promises to add new
technologies to in-car services, offering
users a one-stop application that
will enable access to all the artificial
intelligence (AI) tech needed when it
comes to a vehicle.
Trumore is an infrastructure that will
enable users to benefit from multiple
new services, including renting a vehicle,
selecting a cost-effective driving route,
accessing in-car payment technologies
and benefiting from discounts on public
transportation and air travel.
It also features calculations on power
consumption and carbon emissions.
Karakaş said the fact that they embarked
on their journey with “artists” who
produce in a digital environment was no
coincidence. He stressed they are trying to
shape the entire mobility experience that
the user will go through while moving from
point A to point B.
Karakaş said all smart devices outside Togg
would be included in the scenario that
will be shaped according to the customer
experience.
On the cooperation side, Togg has been
focusing on strategic areas such as mobility
solutions, big data, cybersecurity, FinTech,
blockchain, gamification, smart grids and
mobility services.
Karakaş said Togg has been announcing
cooperations with startups. He cited a
smartphone transformation while speaking
of the ongoing breakthrough.
“Whatever happened years ago when the
mobile phone turned into a smartphone, a
similar transformation is now happening in
the automobile world,” Karakaş noted.
Profitability, user experience, and
everything is changing as cars turn into
smart devices. We are responding with
scenarios that we think will ensure we keep
pace with this change.”
Growing with startups
Speaking of Trumore, the CEO said it
is a digital platform that redefines the
mobility experience by taking it beyond just
traveling from point A to point B.
“Through Trumore, which it positions as
a mobile application with strong business
partnerships and many features, Togg
is offering personalized, user-oriented,
intelligent and empathetic experience
with new generation technologies such as
fintech, insurtech, blockchain, internet of
things (IoT), artificial intelligence, providing
uninterrupted user experience,” said
Karakaş.
Trumore is a platform that earns, navigates,
entertains and constantly develops for
users, he noted. User experience is at the
center of the Trumore business model and
technology, he added.
“Togg defines its platform, which can
process data and improve it with artificial
intelligence, as a ‘user empathy platform,’”
said Karakaş.
Underlining that they cooperate more with
startups, Karakaş stated that they will be
announcing the names and details of the
partnerships soon.
Multiple features, concepts
The Trumore application has been
founded based on concepts that include
“Earn, Go, Play, Scale.”
Its Earn.more covers services that help
users gain, and features FinTech solutions
that offer uninterrupted payment and
rewarding experiences.
The e-wallet, which is within the scope of
Earn.more services enable the creation
of in-car payment, mobile payment and
digital asset wallets.
Under digital asset management, various
reward programs (such as points, NFTs),
digital art collections and NFTs that are
linked to the business model are offered
to the users.
It also features a digital magnet
acquisition application that will enable
users to earn many rewards.
The digital magnet is produced specifically
for the person and journey according
to the route produced by the user and
according to the travel conditions at that
time.
Go.more, which provides location-based
smart services that navigate the user and
provide personalized route suggestions,
features mixed mobility services, charging
networks, restaurants and reservation
operations, all of which promise an
uninterrupted mobility experience for
users.
The savings calculator within the
application makes it possible to take
advantage of services such as road tolls,
electricity consumption and carbon
emission calculations.
Play.more will feature smart life services
that will entertain the user, making
everyday life easier and more enjoyable
through gamification.
Play.more’s services comprise smart life
solutions, usage-based insurance services,
in-car and mobile game applications and
smart health applications.
On the other hand, Togg expresses the
concept of USE CASE Mobility, which it
defines as user-centric, smart, emphatic,
connected, autonomous, shared and
electric, through digital art. It makes
the user experience the concepts of
“Human-Technology,” “East-West,”
“Mind-Heart,” “Unity-Multiplicity” and
“Today-Tomorrow” in the world of duality
through its “Digital Art Mode.”
Users can also link the digital art on the
smart device screen to their TVs or digital
screens at home if they want.
January 2023 46

Over 80K
China-made
Teslas recalled
over software,
seat belt issues
Tesla Inc. is recalling more than 80,000
China-made and imported cars produced as
early as 2013 due to software and seat belt
issues, a statement by the Chinese market
regulator revealed. The U.S.-based electric
car maker has recalled 67,698 Model S and
Model X cars imported to China between
Sept. 25, 2013 and Nov. 21, 2020, due to
software problems affecting the battery
management system in the vehicles.
Tesla said it will upgrade the software of
recalled vehicles.
Tesla also recalled 2,736 imported Model
3 cars manufactured between January
and November 2019, and 10,127 Chinamade
ones of the same model produced
between Oct. 14, 2019 and Sept. 26, 2022.
This was due to potentially faulty seat
belt installation which Tesla will check and
reinstall, it said.
In April, Tesla recalled a total of 127,785
units of Model 3 cars in China, citing
potential faults in semiconductor
components that might lead to collisions.
January 2023 48

Ambitions high
as Türkiye’s
1st car brand
said to feature
competitive
price tag
Türkiye’s first domestically produced
electric vehicle brand will have a
competitive price tag compared to its peers
and even cars with combustion engines
once it hits the roads in the first months
of 2023, its CEO said. Togg began mass
production and sales of its first model, the
C-segment SUV, are set to begin at the end
of the first quarter of the year. It will be the
first electric sport utility vehicle produced
in continental Europe by a nontraditional
manufacturer. It puts Türkiye and President
Recep Tayyip Erdoğan closer to fulfilling a
long-held dream of building the country’s
first national automobile.
Dubbing it a smart device that features
advanced technology, CEO Gürcan Karakaş
said the price of the first model would be
announced in February.
“Togg will have a price that will compete
with vehicles in its class, including internal
combustion engines. All pre-orders will start
to be taken as of February 2023,” Karakaş
told a group of reporters at Togg’s factory in
the northwestern province of Bursa.
“Togg smart device will hit the roads as of
the end of March,” he added.
The vehicle is being produced by a
consortium of five Turkish companies called
the Automobile Initiative Group of Türkiye,
or Togg, in cooperation with the Union
of Chambers and Commodity Exchanges
of Türkiye (TOBB). Karakaş said Togg is a
project that features a 3.5-billion-euro ($3.6
billion) investment that will be spread over
15 years. Around 1.8 billion euros of this
will have been spent by the end of 2023, he
added.
“This resource includes investments for the
development of smart devices, campuses
and technology.”
Besides the SUV, Togg will manufacture
another four models – a sedan,
C-hatchback, B-SUV and B-MPV – through
2030. Mass production of the SUV will be
followed by the sedan.
The brand aims to produce 1 million
vehicles across the five segments by 2030.
Some 30,000 units will be sold for public
services through 2035, Karakaş said.
The current production capacity stands at
around 100,000 vehicles per year, a figure
that Karakaş says is expected to reach
175,000 once the Togg’s factory reaches
its full capacity. The peak output will also
see employment at the plant more than
triple to 4,300, up from the current figure
of 1,400, the CEO said. The 90% automized
facility set up on a 1.2 million square meter
area in Bursa’s Gemlik district will reach a
capacity of manufacturing one vehicle every
three minutes, he noted.
Togg’s SUV is built from 51% locally made
parts, Karakaş noted, saying 75% of
suppliers are based in Türkiye. He cited an
aim to lift the rate of parts made within the
country to 68% in the three years.
Orders placed by individuals will be
prioritized in 2023, throughout which
Karkaş says Togg aims to manufacture and
deliver around 20,000 vehicles.
“Orders will be received with individual
users as a priority and will be delivered
throughout 2023. The first smart device
will be launched to the traffic at the end of
March.”
The joint venture plans to export the EVs to
Europe and then the rest of the world after
up to 18 months of only domestic sales,
Karakaş said.
Vehicles that have been rolled out are being
sent to accreditation test centers abroad for
certification and homologation procedures,
the CEO noted.
“The devices are subjected to 92 different
tests, 16 of which are new regulations. The
number of devices sent for the tests will
reach 165 by the end of December,” he
said.
“They will complete their tests and receive
type approvals. After receiving the type
approvals, mass production for the users will
begin with orders.”
The car was designed by Italy’s Pininfarina
design company, which has produced models
for Ferrari and California-based electric
carmaker Karma.
The consortium inked a deal with Farasis, one
of the world’s most prominent companies, to
build a lithium-ion battery factory near Togg’s
production site in Bursa. Togg has already
launched efforts to set up a charging station
network across Türkiye under a brand named
Trugo. Over 1,000 stations that will feature
charging capacities of between 180 kilowatts
(kW) and 300 kW are aimed to be established
at over 600 spots in 81 provinces.
Karakaş said the first stations were set up
at a stopover along the highway between
Istanbul and Ankara. Stressing the company’s
focus on innovative technologies, Karakaş
said the company has held talks with over
300 startups engaged in everything from
blockchain and digital payments to mapping
to date and already works with 19 ventures.
Togg set out with a plan in which smart
device revenues and other revenues are
balanced, the CEO said.
“It will receive revenue from both the sale of
devices and the use of its mobile services. At
the same time, since it can control battery
and software costs, this will also contribute to
its profitability.”
January 2023 52

Demand for
SUVs leaps as
Türkiye awaits
its 1st national
car on roads
The demand for sport utility vehicles
(SUVs) in Türkiye has gained pace in the
first 11 months of this year, according to
industry data, in a trend that comes as
the country’s first domestically produced
electric car brand is set to hit the roads.
Some 208,693 units of SUVs have been
sold from January through November
this year, according to the Automotive
Distributers and Mobility Association
(ODMD) data, up 15.4% versus the same
period of 2021.
Consumer preferences boosted the share
of SUVs in overall car sales to 41.3%, up
from 35% a year ago, according to the data
that showed sedans’ share dropping to
37.2%, down from 39.4%.
Some 188,244 sedan automobiles were
sold in the first 11 months. Hatchbacks
sit third with a 19.7% share, down from
23.7% in 2021, and 99,815 sales, the data
showed. Overall sales of passenger cars
and light commercial vehicles in Türkiye
slipped 1% year-over-year in the January-
November period to 688,063 units, the
ODMD said, driven by soaring prices and
as problems from logistics bottlenecks
to an ongoing chip shortage curbed
production. Passenger car sales were
down 2.4% from a year ago to 505,886
vehicles, while light commercial vehicles
saw a drop of 3.4% to 162,177 according
to the ODD. Yet sales in November
jumped 36.7% year-over-year to 82,311
units, up from 60,216 a year ago. Sales of
both passenger cars and light commercial
vehicles were up 37.8% and 34%,
respectively.
The share of SUVs is expected to gain
even further pace once Türkiye’s first
domestically produced electric vehicle
brand hits the roads in the first months
of 2023. Togg began mass production in
late October and sales of its first model,
the C-segment SUV, are set to begin at the
end of the first quarter of the year.
It will be the first electric sport utility
vehicle produced in continental Europe by
a nontraditional manufacturer.
The vehicle is being produced by a
consortium of five Turkish companies
called the Automobile Initiative Group
of Türkiye, or Togg, in cooperation with
the Union of Chambers and Commodity
Exchanges of Türkiye (TOBB).
Besides the SUV, Togg will manufacture
another four models – a sedan,
C-hatchback, B-SUV and B-MPV – through
2030. Mass production of the SUV will be
followed by the sedan.
The brand aims to produce 1 million
vehicles across the five segments by 2030.
The current production capacity stands at
around 100,000 vehicles per year, a figure
that is expected to reach 175,000 once
the Togg’s factory reaches its full capacity.
January 2023 54

David Brown Automotive Mini Remastered
Marshall Edition lands in Paris and makes
European Debut
David Brown Automotive has unveiled
its Mini Remastered Marshall Edition – a
classic Mini reimagined in collaboration
with the iconic audio equipment brand
Marshall Amplification – in Paris, making its
European debut.
The modernised take on the classic Mini
– conceived to commemorate Marshall
Amplification’s 60th anniversary – will
be on show until 12th December in the
CITADIUM complex, bringing timeless
British style, and considerable rock and roll
appeal, to the French capital.
The cutting-edge, boutique space –
home to a carefully curated selection
of internationally renowned luxury and
fashion brands - will play host to this 21st
century take on a the classic Mini, which
is on show to the public for the very first
time.
Launched to great fanfare earlier this
year, Mini Remastered Marshall Edition
is handcrafted alongside other Mini
Remastered variants, as well as the
Speedback grand-tourer range, at David
Brown Automotive’s state of the art facility
in Silverstone, UK.
Michelle Gay, Sales & Marketing Director,
January 2023 56

David Brown Automotive, said: “Mini Remastered Marshall
Edition is a stunning example of precision design and
handmade quality, bringing two British brands together.
It is a modern, rock and roll take on one of Britain’s most
iconic shapes and we are delighted to bring it to the heart
of Paris - the world’s fashion and style capital.”
Each David Brown Automotive Mini Remastered is
painstakingly hand-built over thousands of hours, reengineered
from the ground up using a new shell; it’s a
classic Mini reimagined for the 21st century, enhanced
with a sumptuously trimmed interior and comprehensively
remastered mechanicals. Mini Remastered Marshall
Edition is distinguished from the core Mini Remastered
range by unique colour, materials and finishes – all
inspired by the styling of Marshall’s iconic products, as
well as an amazing Marshall 8-speaker sound system and
pull-out amp in the loadspace.
The special colour scheme to Mini Remastered
Marshall Edition is unique to the limited run machines,
finished in exclusive ‘Marshall Black’ paint, which is
complemented by dark-chrome exterior brightwork,
offset by contrasting ‘Marshall Gold’ painted accents. Mini
Remastered Marshall Edition is also packed with unique
audio equipment features, developed in partnership
between David Brown Automotive and the engineers
at Marshall. Mini Remastered Marshall Edition’s special
features include a meaningfully upgraded in-car sound
system, as well as a bespoke Marshall DSL1 Combo
amplifier neatly integrated into in the Mini’s leatherlined
luggage compartment. Arthur Grison, Key Account
Manager, Zound Industries (the distributor of Marshall
Amplification in France), added: “Since revealing Mini
Remastered Marshall Edition earlier this year – a key part
of the celebrations to mark Marshall’s landmark 60th
anniversary. We can’t wait to see the response from the
public during the car’s star turn in Paris in the build-up to
a very busy Christmas shopping period.”
January
57 2023

Turkish exports
to surpass
year-end target
As 2022 draws to a close, Türkiye’s exports
will not fall below the year-end target that
was set, Trade Minister Mehmet Muş said.
Türkiye has set a $250 billion export target
for this year, after reaching a record $225
billion in 2021.
“We will not fall short of the target we set
for exports,” Muş told a summit organized
by Türkiye’s leading media group and Daily
Sabah’s parent company, Turkuvaz Media,
in Istanbul.
“Our target was set at $250 billion, and we
will exceed that,” he noted.
However, Muş added that there is a
slowdown in foreign demand, especially
due to recent rate hikes, which they will try
to circumvent with minimal impact.
“Our upward trend has continued since the
second half of the year, but now we have a
slower increasing trend due to a decrease
in external demand.”
Muş said an additional target of $80 billion
was added year, with the aim to diversify
the market to reach it.
One of the main drivers of Türkiye’s
economic growth this year, exports hit
record-high volumes throughout the
first 11 months of this year. Yet, a global
slowdown has put a drag on foreign
demand, notably among Türkiye’s largest
trade partners, spearheaded by Europe.
Outbound shipments from January through
November jumped 14% from a year ago to
$231 billion, while imports were up 36.6%
to nearly $331.1 billion, driven mainly by
steep rises in energy and commodity prices
after Russia’s invasion of Ukraine.
Muş previously said there has been a
slowdown in the growth trend of exports,
citing weakening demand in the European
Union, where almost half of the Türkiye’s
shipments go.
“A slowdown there (in Europe), whether
we want it or not, a drop in demand there
affects our exports,” he said.
January 2023 60

Crisis in Europe
touted as
opportunity for
Turkish retailers
The recession risks that are plaguing
Europe have triggered an exodus of brands
from shopping malls, in what seems to
have turned into an opportunity for Turkish
retailers.
Mall investors have particularly shifted
their focus to Turkish brands that attended
the largest annual international gathering
for retailers, MAPIC 2022.
More than 80 firms and a delegation of 250
people attended the landmark event joined
by the world’s leading retail brands and real
estate players. The fair in Cannes, France
ran from Nov. 29 through Dec. 1.
Companies gathered at the Turkish Brands
booth under the coordination of the
Istanbul Apparel Exporters’ Association
(IHKIB) at the fair, with Alkaş serving as
MAPIC’s Türkiye representative.
The Turkish booth included many
prominent players such as AC&co Altınyıldız
Classics, Chakra, D’S Damat, Ipekyol, Kiğılı,
Madame Coco, NaraMaxx, Nebim, Penti ve
Perspective. Among others, Tavuk Dünyası
and GAGAVA attended the fair with their
own booths.
Hilal Suerdem, deputy chair of Kiğılı,
stressed the fact that the fair was
extremely dynamic this year, also
highlighting what he said was a “warmer
approach” toward Turkish brands.
Haluk Özkarakaşlı, the head of NaraMaxx,
stated that it was important for Turkish
brands to take part in such a fair. “This is
an important platform for brands to show
themselves,” Özkarakaşlı said.
For their part, Osman Çavuşoğlu, Altınyıldız
general manager in charge of international
operations, emphasized that they have
grown abroad and turned the crisis into
an opportunity after the coronavirus
pandemic. Penti International Franchise
Manager Yavuz Mert stressed there has
been a high demand for Turkish brands
from many places after the recession in
Europe. Sabah, the flagship publication
of Turkuvaz Media Group and its sister
newspaper of Daily Sabah gathered the
attending retailers at a dinner event it
organized on the sidelines of MAPIC.
The event at the Hotel Barriere Le Majestic
was attended by Suerdem, Özkarakaşlı and
his wife Yeliz Özkarakaşlı, İpekyol member
of the board Necdet Ayaydın and Alkaş
Consultancy Chairperson of the Board Avi
Alkaş, among others.
Retailers extended their appreciation
for Turkuvaz Media Group’s support
and efforts to promote the Turkish retail
industry. Meanwhile, retailers have started
to open stores in the metaverse as well.
NaraMaxx’s Özkarakaşlı said they have
been continuing their activities in the
women’s clothing sector for more than
10 years. He said the whole world has
seen more clearly with the pandemic that
keeping up with digital transformation is
one of the most powerful ways to increase
brand awareness.
“Since 2020, we have added digital
transformation to our brand values,
started to make new investments in the
field of technology and have established
a digitalization team within our company.
In the past two years, we have achieved
projects in the fields of blockchain,
NFTs (non-fungible tokens) and the
metaverse. We have opened a store on
the Decentraland platform, one of the first
metaverse projects,” he noted.
January 2023 62

China’s producer
prices fall,
consumer
inflation slows
on soft demand
China’s factory-gate prices showed
an annual fall for a second month in
November, while consumer inflation
slowed, indicating weak activity and soft
demand in an economy that has been held
back by tough pandemic controls.
Analysts said they expected the
government to keep interest rates low and
take measures to boost confidence.
The producer price index (PPI) was down
1.3% from a year earlier, unchanged from
an annual contraction seen in October,
according to National Bureau of Statistics
(NBS) data issued. That was slower than a
1.4% fall tipped in a Reuters poll.
The November consumer price index (CPI)
rose at its slowest pace in eight months,
climbing 1.6% from a year earlier, which
was less than the 2.1% annual rise seen in
October but in line with a Reuters poll.
“These data suggest the economic
momentum (continues) to weaken,” said
Zhiwei Zhang, chief economist at Pinpoint
Asset Management.
A high-level political meeting, a gathering
of the ruling Communist Party’s Politburo,
emphasized that in 2023 the government
would focus on stabilizing growth,
promoting domestic demand and opening
up to the outside world.
Zhang said that, although the government
had eased pandemic controls, it would take
further measures to spur the economy.
“The Politburo meeting ... identified
weak confidence as a major problem
for the economy,” he said. “I expect the
government will do more to boost market
and household confidence. The fast pace
of reopening indicates the government’s
sense of urgency.”
Growth in the world’s second-largest
economy has sagged this year, largely
impacted by the uncompromising
COVID-19 curbs as global demand has also
wavered.
The producer price deflation and milder
consumer price inflation of November
accompanied record COVID-19 infections
and related curbs that disrupted
production and curbed mobility.
Although markets have cheered the shift
in pandemic policy, economists say it will
likely depress growth over as infections
surge, bringing an economic rebound only
later in 2023.
Producer deflation was led by the steel
industry, in which prices were down 18.7%.
Part of the explanation for slower growth in
consumer prices was in food markets.
Food prices were up 3.7% with a rise
of 7.0% seen in October. Within the
food category, pork was a factor behind
moderating inflation: it was 34.4% more
expensive in November than in the same
month year ago, while in October the
annual rise had been 51.8%.
Underlying core annual inflation, which
excludes volatile food and energy prices
its figure was just 0.6% in November,
unchanged from October.
“The overall inflation pressure remains
benign in China, and we expect the
CPI inflation will be around 1.6% for
2023, down from 2.0% in 2022. Given
this, the monetary policy will remain
accommodative over the coming year,” said
Hao Zhou, chief economist at Guotai Junan
Group.
China’s central bank has kept its benchmark
one-year loan prime rate at 3.65% since
August. It expects consumer inflation to
remain moderate.
January 2023 66

Positive effects
of low rates
policy to be
felt more soon:
Erdoğan
President Recep Tayyip Erdoğan said
Türkiye would start to see a stronger
positive effect of the government’s
economic policy prioritizing low interest
rates on inflation soon, as he reiterated the
government’s aim to address the soaring
cost of living.
The government has endorsed low interest
rates to boost exports, production,
investment and produce
new jobs as part of an economic program,
eventually aimed at lowering inflation
by flipping the country’s chronic current
account deficit to a surplus.
“We will feel the positive effects of our
low interest rate policy, which prioritizes
production, employment and exports, on
inflation more soon,” Erdoğan told an event
in Istanbul.
To counter the expected economic
slowdown in the second half of this
year, Türkiye’s central bank embarked
on an easing cycle between August and
November, slashing its policy rate by 500
basis points to 9%.
Price increases in Türkiye moderated in
November, according to official data,
signaling that inflation pressures that have
been plaguing consumers for about a year
and a half might be finally easing.
Annual inflation dropped below 85% after
touching a 24-year high in October. It is
expected to decline sharply as a result of
the base effect at the end of the year and
falling energy prices globally.
“We are solving the issue of the cost
of living, which is the biggest source of
distress in the whole world, including
Europe and America, step by step,” Erdoğan
said. Treasury and Finance Minister
Nureddin Nebati said the decline in
inflation will be seen due to the base effect
that will last until the end of May, stressing
that negative rates may be observed in
food along with summer.
“The citizen does not look at the ‘base
effect’ in inflation, but at his pocket. We
will see a mathematical decline, but there
will also be a decline that will be felt,”
Nebati told the Turkish business daily Nasıl
bir Ekonomi.
January 2023 68

Lira not far from ‘optimal point’
Nebati also addressed the recent remarks
by exporters who complained that the
Turkish lira was becoming increasingly
overvalued and that foreign exchange rates
should be directly proportional to inflation
levels.
The lira’s current level is not “too far
away from the optimal point” and further
depreciation could fuel consumer inflation,
he said.
“(Exporters) should not complain in vain
about the exchange rate ... The increase
in the foreign exchange will disrupt our
inflation plan,” the minister noted.
Turkish Exporters Assembly (TIM) chair
Mustafa Gültepe said the stability in the
lira, despite soaring inflation, is hurting
exporters’ competitiveness and some
risk losing markets. However, he did not
propose a specific lira level.
Authorities have employed a battery of
regulations to tightly control the exchange
rate in the wake of a deep slide in the lira
in late 2021, a year in which the Turkish
currency lost 44% to the U.S. dollar. The
currency dropped another 29% this year,
but has stabilized since the summer
and held steady near TL 18.6 since early
October.
The earlier lira depreciation gave exporters
of Turkish textiles, white goods and
automobiles a big competitive edge
globally. But since the central bank and
government employed its reservesmanagement
system, those benefits began
to erode.
“2022 will go down in history as the worst
year. There is a foreign trade deficit of $100
billion and a current account deficit of $50
billion, but we are leaving this difficult
period behind,” Nebati said.
One of the main drivers of Türkiye’s
economic growth this year, exports hit
record-high volumes throughout the
first 11 months of this year. Yet, a global
slowdown has put a drag on foreign
demand, notably among Türkiye’s largest
trade partners, spearheaded by Europe.
Outbound shipments from January through
November jumped 14% from a year ago to
$231 billion, while imports were up 36.6%
to nearly $331.1 billion, driven mainly by
steep rises in energy and commodity prices
after Russia’s invasion of Ukraine.
Separate data showed Türkiye posted the
smallest current account deficit in a year,
driven by robust tourism revenues.
The shortfall in the current account, the
broadest measure of trade and investment,
came in at $359 million in October,
according to data from the central bank.
The figure came in versus a revised $2.88
billion deficit in September.
Income from foreign tourists came in at
$5.5 billion, the second-highest monthly
inflow on record, according to central
bank data going back nearly four decades.
Official reserves rose $5.1 billion, the
second biggest jump in 2022 after the
$10.8 billion increase registered in August,
after a Russian state company transferred
funds to Türkiye for the construction of a
nuclear power plant.
Bank accounts set up by Russian tourists
are also contributing to the current buildup
in Türkiye’s foreign currency holdings,
Nebati said.
January
69 2023

Türkiye drives post-pandemic tourism
recovery in Europe: Report
Türkiye’s tourism sector has achieved
the most significant recovery among
European countries in the post-pandemic
era with a 61% rise in demand compared
to 2019, according to the European Travel
Commission’s (ETC) November report.
The ETC’s “European Tourism Trends and
Prospects” report stated that Türkiye
positioned itself in first place while there
was a rapid recovery in tourism demand
similar to that of 2019 across Europe.
“Europe’s return on travel will continue
through the remaining months of 2022, led
by cost-conscious and value-driven travel,”
the report said.
“All things considered; the European
continent is expected to recover to close to
75% of 2019 inbound travel volumes by the
end of 2022.”
The report said that “travel enthusiasm
persisted this summer with over half
of reporting destinations recovering to
at least 77% of 2019 levels of foreign
arrivals,” highlighting that the rebound was
led mostly by Southern Mediterranean
destinations.
“Based on data to August, Türkiye, Serbia
and Luxembourg made the strongest
comeback,” it said.
“While Türkiye remains a good value
destination, Serbia is open to Russian
travelers without visa requirements.
Indeed, there has been an influx of
Russians arriving in Serbia,” it added.
The sharpest declines in tourist arrivals,
the report said, were recorded in the Baltic
states, Finland, Romania and Slovakia.
Currently, the Baltic states have a warrelated
ban on Russian travel while Slovakia
has suspended tourist visa applications for
Russians.
Türkiye’s tourism revenues kept on the
path of growth throughout the year.
In the first 10 months of the year, the
number of foreign visitors climbed 88.1%
to 39.61 million, on pace to roughly match
the pre-pandemic levels of 2019, according
to the latest data.
The 10-month figure stood at 21.1 million
in 2021, 11.2 million in 2020 and 40.7
million in 2019, the Culture and Tourism
Ministry said recently.
In addition to the influx from Russia, the
rebound this year has been driven by
a major leap in demand from Europe,
spearheaded by Germany and the United
Kingdom.
Istanbul, Türkiye’s most famous province
and the largest one by population, was the
top draw for foreign visitors, welcoming
13.4 million tourists from January through
October this year.
It was followed by the Mediterranean
resort city of Antalya with 12.2 million
visitors, while Edirne, a northwestern
province bordering Bulgaria and Greece,
welcomed nearly 4 million tourists, the
data showed.
Germans made up 13.3% of all visitors
in the 10-month period with 5.3 million,
followed by Russians with 4.6 million,
Britons 3.2 million, Bulgarians 2.3 million
and Iranians with 2 million.
If Turkish citizens living abroad are added
to the count, the 10-month figure reaches
45 million.
The ETC report, meanwhile, further showed
that the January-September data relative
to 2021 features a strong performance in
the European hotel industry compared to
other regions.
“Driven by strong occupancy rates, up 62%
over prior-year levels and a 30.1% rise in
ADR (average daily rate) alongside surging
travel demand, Europe recorded a 111%
increase in RevPAR (Revenue Per Available
Room),” it said.
It said European airlines held up well this
summer with August flight volumes down
just 11% relative to 2019.
January 2023 72

Tourism revenue
target revised
to $46 billion:
Minister
Türkiye has revised its targets upwards for
tourist arrivals and tourism revenue for
2022 to 51.5 million and to $46 billion,
Culture and Tourism Minister Mehmet Nuri
Ersoy has announced.
Some 60 million visitors and $56 billion
in tourism revenues are expected, Ersoy
said, speaking at the parliament where he
presented his ministry’s budget for 2023.
“All those numbers point to the fact that
Türkiye is now in the super league in the
global tourism industry. Our competitors
are the top countries [in tourism]. We are
moving toward meeting our targets,” Ersoy
said.
Türkiye at the start of 2022 set tourist
arrival and tourism revenue targets at 42
million and $35 billion. In the face of the
rebound in tourism activity, those targets
were revised upwards first in July to 47
million and $37 billion. In October, Ersoy
announced another revision for the 2022
targets to 50 million tourist arrivals and $44
billion in tourism revenues.
In the January-October period, 39.6 million
foreign tourists visited Türkiye, marking an
88 percent increase from the same period
of 2021. Including Turkish citizens residing
abroad, tourist arrivals exceeded 45 million
people.
In the third quarter of 2022, tourism
revenues rose by 27 percent year-on-year
to $17.95 billion. In the first nine months
of the year, tourism revenues amounted to
$35 billion, exhibiting a 68 percent increase
from a year ago.
Türkiye successfully managed the crisis
in the global tourism industry, which was
triggered by the COVID-19 pandemic,
engaging in very effective campaigns
abroad to promote the country, Ersoy said.
Under the “Safe Tourism Program,” more
than 12,000 facilities and vehicles received
a certificate as of June, according to the
minister.
“Presently, we are carrying out special
promotion campaigns through digital and
conventional means of communication in
200 countries.”
Ersoy also noted that Türkiye signed a
three-year cooperation agreement with
the Global Sustainable Tourism Council and
prepared a “Türkiye Sustainable Tourism
Program.”
This program sets out sustainability
criteria for accommodation facilities, the
minister explained. Under the sustainability
program, which covers the years 2023,
2025 and 2030, all accommodation
facilities will gradually become
environment friendly, Ersoy said.
The government provided a total of 2.3
billion Turkish Liras in financial support
between 2002 and 2022 to improve
infrastructure and as part of sustainability
efforts, according to Ersoy.
January 2023 74

M&A volume hits
$11 billion
The volume of merger and acquisition (M&A) deals in Türkiye
increased in 2022 to stand at $11 billion, according to a report
by Deloitte.
The M&A volume in 2022 was below the last 10-year average
but still rose by 8 percent this year from 2021, the report noted.
The top 10 deals accounted for around 50 percent of the total
M&A volume this year. Some 295 with a deal value of less than
$10 million made up for 73 percent of all M&As, while those
deals’ share in total was only 4 percent.
The largest deal was the Türkiye Wealth Fund’s (TVF) purchasing
of shares in Türk Telekom. This deal alone accounted for 15
percent of all M&A volume in 2022, according to the report.
TVF announced in March this year that it signed a share
purchase agreement to acquire 55 percent of shares of the
telecom giant. Following the deal, TVF became the majority
shareholder of Türk Telekom with a 61.68 percent stake.
The size of the average deal was $27 million, similar to the
same levels seen in the past years, the reports said.
At a time when the global M&A volume contracted, the
transactions in Türkiye gained momentum, said Özlem Ulaş
from Deloitte Türkiye.
“Foreign investors accounted for half of all deals, but foreign
investor deal volume declined,” she added.
War, energy security and global inflationary pressures are the
new challenges and risks, Ulaş said.
“Despite all those challenges in the investment environment,
the M&A activities remained robust,” she added.
January 2023 75

Türkiye to invest
$21.6 bln in the
maritime sector
by 2053
Türkiye will invest $21.6 billion more in its
maritime sector by 2053, Transport and
Infrastructure Minister Adil Karaismailoğlu
has said.
Those investments will contribute around
$180 billion to the Turkish economy, the
minister added.
“Our contribution to production will
be $300 billion, while adding 5 million
jobs over the next 30 years,” said
Karaismailoğlu, recalling that total
investments in the country’s infrastructure
and communications will amount to $198
billion in the next three decades.
Some 93 percent of imported goods and
81 percent of exports in Türkiye were
transported by ships in 2021, the minister
said, noting that the Turkish fleet ranks
15th in the world with a total of 31.3
million deadweight tonnage.
“We are expecting the deadweight tonnage
to increase to 36 million at the end of the
year, which will help Türkiye climb up in the
ranking to the 14th spot.”
The number of shipyards in the country
increased from 37 in 2022 to 84, while the
number of ports rose from 149 to 217,
Karaismailoğlu said.
Despite the challenges from the pandemic,
the Turkish maritime sector continued to
grow in 2020 and 2021, according to the
minister.
“While global container handling and total
cargo handling contracted 1.2 percent and
3.8 percent, the number of containers
handled at the Turkish ports increased by
8.3 percent from a year ago to 12.6 million
TE. Total cargo handled also grew 6 percent
to 526 million tons.”
From January to October, cargo handling at
the Turkish ports increased by 5 percent on
an annual basis and total cargo handling is
expected to reach 545 million tons at the
end of this year, Karaismailoğlu said.
January 2023 76

Turkish Airlines wins best design award in Europe
National flag carrier Turkish Airlines has
been honored as Europe’s best-designed
airline for 2022, it announced.
TheDesignAir awards selected the carrier
as the “Design Airline of the Year” for
its touch points such as lounge, check-in
islands, ticket offices and in-flight design
and products.
Ahmet Olmuştur, the carrier’s chief
marketing officer, said: “From the entrance
to the check-in counters and lounges at
Istanbul Airport, and to the new cabin and
seat designs on board, we meticulously
inject our Turkish Airlines brand identity at
every touch point.
“With our traditional hospitality, we strive
to make our passengers’ experience
privileged by providing service beyond
their expectations.”
“Turkish has continued to excel at
passenger experience, brand and customer
service, and where some carriers have
been cutting back, Turkish has continued
to invest in enhancements both on the
ground and in the skies,” said TheDesignAir.
“The use of a consistent brand image, color
palette and design language throughout
the digital and physical experiences has
helped produce a powerful airline brand
that continues to impress against its
European counterparts. Turkish Airlines has
once again this year reaffirmed its position
as a leading design airline of the world,
taking the crown for the European region
once more.”
Founded in 1933 with a fleet of five aircraft,
Turkish Airlines now flies to 342 points in
129 countries with a fleet of 395 aircraft.
Erdoğan, Gazprom chief discuss Turkish gas hub project
President Recep Tayyip Erdoğan and Alexei Miller, the head of
Russian energy giant Gazprom, discussed the project to make
Türkiye a gas hub and Russian gas supplies, in a meeting held in
Istanbul.
Putin first proposed producing a gas base in Türkiye in October
as a means to redirect supplies from the damaged Nord Stream
pipelines and export them on to the European market, an idea that
Erdoğan has supported.
Putin has repeatedly said that a natural gas hub could be set up in
Türkiye fairly quickly, forecasting many European customers would
emerge in such a marketplace.
Erdoğan previously said Russian and Turkish energy authorities
would work together to designate the best location for the
potential gas distribution center, adding that Türkiye’s Thrace
region, bordering Greece and Bulgaria, appeared to be the best
spot. Türkiye is home to seven international natural gas pipelines
and one of the ways Russian gas reaches Europe is through the dual
TurkStream natural gas pipeline. With a total capacity of 31.5 billion
cubic meters (bcm), each line has an annual capacity of 15.75 bcm.
The European Union, which previously turned to Russia for about
40% of its gas needs, is seeking to wean itself off Russian energy
following Moscow’s invasion of Ukraine.
January 2023 78