Automotive Exports September 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 Sales Consultant<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 />

Advisory 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 />

Graphic & Design Advisor<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 />

Ready to upgrade the automotive exports<br />

As known, the autoparts industry of Türkiye has developed rapidly in line with the<br />

automotive industry. The Turkish autoparts industry with its large capacity, wide variety of<br />

production and high standards, supports automotive industry production and the vehicles<br />

in Türkiye and also has ample potential for additional exports.<br />

Whereas previous manufacturing activity focused on domestic markets only, production<br />

now extends to export markets. As a result of this structural change, the competitiveness<br />

at the domestic level is now replaced with competitiveness on a global scale, both in<br />

terms manufacturers and suppliers. Fluctuations in production resulting from global<br />

economic crises have given way to stable production patterns. In addition, the consumer<br />

satisfaction standard based on domestic market demands has now become a quality<br />

standard satisfying customers worldwide.<br />

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

the local level to the global level, Turkish manufacturers and suppliers now 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. These improvements<br />

relate to a need to build advanced technological skills, infrastructure, research and<br />

development means; capable of effective and successful technical cooperation; skilled in<br />

unique product development; equipped with the ability to obtain shares in global projects<br />

as well as to have high brand competitiveness.<br />

Actually, auto manufacturers increasingly choose Türkiye as a production base for their<br />

export sales. This is evidenced by the fact that 73 percent of vehicle production in Türkiye<br />

was destined for international markets in 2022. Türkiye exported more than 950,000<br />

vehicles to international markets in the same year.<br />

We think that technology and competitive power will always be the two keys for the<br />

survival of the automotive industry. Dynamism and innovation have turned out to be the<br />

rules of the game in the automotive industry as usual.<br />

This month, we participate in Equip Auto Lyon, <strong>2023</strong> to convey the messages of the<br />

Turkish automotive and autoparts industrialists.<br />

Our publications remain at the service of those business people seeking to increase their<br />

share in the increasingly competitive automotive market. They are ready to upgrade their<br />

export volume further.<br />

We wish them and their trading partners a fruitful business<br />

automotiveexport<br />


Equip Auto Lyon, <strong>2023</strong> Heralds New Horizons<br />

Considered to be the headline event in<br />

<strong>2023</strong> by the automotive aftersales and<br />

connected mobility services markets, this<br />

first Lyon edition has received the strong<br />

support of great numbers of professionals.<br />

To illustrate their loyalty and dedication,<br />

the show’s organisers and the exhibitors<br />

themselves have planned an array of<br />

exclusive highlights and special features,<br />

reflecting the tradeshow’s aim of fostering<br />

exchange by combining business and<br />

conviviality.<br />

With five theme villages, three major<br />

forums, ten panel discussions, an exclusive<br />

display on the history of tyres: “The<br />

tyre has a history, the tyre has a future”<br />

in partnership with the French Tyre<br />

Association, and an unprecedented car<br />

wrapping feature, EQUIP AUTO Lyon has<br />

lined up an exciting and comprehensive<br />

programme of content.<br />

Among these special events, the<br />

prominent car wrapping expert Morgane<br />

Quetier from the RMC Découverte TV<br />

show “Les reines de la mécanique”<br />

will be in Lyon for the full three-day<br />

duration of the show. Here, she will put<br />

on car wrapping demonstrations in the<br />

exhibition’s Bodywork sector, providing<br />

visitors with the opportunity to try their<br />

hand and test their skills.<br />

Meanwhile, with a focus on fun and<br />

relaxation, exhibitors and their guests will<br />

have the chance to chat, be entertained<br />

and take part in the various games and<br />

features on offer at the EQUIP AUTO<br />

exhibitor party on Friday 29 <strong>September</strong>:<br />

games and features with a sporting or<br />

culinary theme will laid on at this festive<br />

event!<br />

An outdoor demo zone will also be set up<br />

for the benefit of professionals.<br />

The Association Eco Entretien (ecomaintenance)<br />

will produce live<br />

demonstrations of “5 gaz” audits using<br />

Eco Entretien labelled measuring devices.<br />

The association will also conduct fine<br />

particulate measurements; already in<br />

force in several European countries, these<br />

assessments are intended to combat<br />

pollutant emissions and inform public<br />

debate.<br />

Autosmart, a global manufacturer<br />

and supplier of car care products, will<br />

present its Autosmart franchise concept,<br />

illustrating its intention to stay ever closer<br />

to the market. To promote the power of its<br />

concept Autosmart will present its mobile<br />

shop and product range to the visitors in<br />

attendance.<br />

BMW will offer an exclusive<br />

demonstration of the semi-self-driving<br />

technology of the BMW i7, where the<br />

car moves with astonishing ease and<br />

precision, thus illustrating the permanent<br />

dedication of BMW to innovation and the<br />

future of mobility. BMW will also be on<br />

hand to meet the sector’s professionals<br />

and highlight the career opportunities<br />

offered by the brand as part of its<br />

commitment to training and supporting<br />

talent, notably that of mechanics and<br />

technicians.<br />

FACOM, a manufacturer of hand-held<br />

tools for mechanics professionals with<br />

an over-100-year history, will introduce<br />

its FACOM Demonstration Truck with its<br />

range of tools, its new features and its<br />

innovations. An exceptional surprise event<br />

around the Demo Truck will delight the<br />

fans of tools and the brand.<br />

<strong>September</strong> <strong>2023</strong> 10

Auto sales leap 115 pct in July<br />

A total of 112,459 passenger cars and<br />

light commercial vehicles (LCVs) were sold<br />

in July, marking a robust 115.4 percent<br />

increase from a year ago.<br />

The numbers pointed to the highest ever<br />

July sales.<br />

As availability problems are largely resolved<br />

more cars entered the market, consumers<br />

are anticipating higher car prices in the<br />

coming months that’s why they increased<br />

their purchases of vehicles, people from<br />

the auto industry said, explaining the<br />

strong July sales number.<br />

Passenger car sales grew more than<br />

109 percent year-on-year to nearly<br />

86,000, while the annual increase in light<br />

commercial vehicles was 138 percent, data<br />

from the <strong>Automotive</strong> Distributors’ and<br />

Mobility Association (ODMD) showed.<br />

The expansion in the passenger car market<br />

slowed from 68.5 percent in May to 40.1<br />

percent in June.<br />

Data from the association showed that<br />

passenger car sales were 79.5 percent<br />

higher than the 10-year average.<br />

Electric vehicle sales rose by a staggering<br />

1,392 percent from July 2022 to 4,013,<br />

which accounted for 4.7 percent of all<br />

vehicle sales. From January to July, a<br />

total of 17,307 EVs were sold on the local<br />

market, marking a 584 percent increase<br />

from the same period of last year. Türkiye’s<br />

indigenous electric carmaker Togg said<br />

it delivered 627 cars to their owners in<br />

July, which brought the number of total<br />

deliveries of its T10X model to 1,435.<br />

“We consolidated our market leader<br />

position in the electric C-SUV segment,” the<br />

company said on Twitter. Hybrid car sales<br />

in the first seven months of <strong>2023</strong> grew at a<br />

slower pace of 63 percent to a little more<br />

than 53,000.<br />

In January-July, total vehicles sales<br />

- including passenger cars and LCVs -<br />

increase by 63.1 percent to 668,828.<br />

The passenger car market expanded at 62<br />

percent as 516,288 cars were sold, LCV<br />

sales were up 68 percent to 152,540.<br />

<strong>September</strong> <strong>2023</strong> 12

<strong>Automotive</strong><br />

exports expected<br />

climb to $34<br />

billion this year<br />

The Turkish automotive sector’s export<br />

revenues may climb to $34 billion this year,<br />

according to a report by KPMG.<br />

Last year, the local industry produced 1.3<br />

million vehicles and sales on the local<br />

market amounted to 827,000 while 970,000<br />

vehicles were shipped to foreign markets.<br />

Data from the <strong>Automotive</strong> Manufacturers’<br />

Association (OSD) showed that export<br />

revenues of Turkish carmakers increased by<br />

5.5 percent last year compared with 2021<br />

to stand at $31.5 billion. The industry’s<br />

exports have exceeded $20 billion in<br />

the first seven months of <strong>2023</strong>, rising<br />

16 percent from the same period of last<br />

year, according to the Turkish Exporters’<br />

Assembly (TİM). The automotive sector<br />

accounted for 16 percent of Türkiye’s<br />

total exports in the January-July period.<br />

The KPMG report noted the availability<br />

problems in the auto market due to the<br />

semiconductor shortages, coupled with<br />

the special consumption rates depressed<br />

domestic demand in 2022. However, the<br />

local auto industry appeared to have<br />

overcome this availability problem. In July,<br />

the combined sales of passenger cars and<br />

light commercial vehicles (LCV) leaped<br />

115.4 percent from a year ago. Passenger<br />

car sales grew more than 109 percent to<br />

around 86,000, while LCV sales soared<br />

almost 138 percent to 27,000.<br />

Experts said that carmakers were able to<br />

deliver the orders to their customers, which<br />

partially explained the surge in sales.<br />

Consumers also decided to buy now,<br />

anticipating that the car prices will<br />

increase in the coming months due to the<br />

depreciation of the Turkish Lira, which led<br />

to a sharp rise in vehicle demand in July,<br />

according to experts. Demand has been<br />

strong over the past months also because<br />

people purchased cars as an investment<br />

to protect their savings against inflation.<br />

Those, who cannot buy a house, which is<br />

a favorite investment among Turks, due to<br />

exorbitant property prices, turned to cars,<br />

said experts.<br />

<strong>September</strong> <strong>2023</strong> 16

2024 to mark new records for<br />

Türkiye’s oil production<br />

Türkiye’s state energy company Turkish<br />

Petroleum Corporation (TPAO) is set to<br />

surpass all previous production figures by<br />

the end of this year, setting a new record<br />

and making <strong>2023</strong> a remarkable year for the<br />

company, Energy and Natural Resources<br />

Minister Alparslan Bayraktar said.<br />

The newly appointed minister was speaking<br />

during a field visit to southeastern Şırnak<br />

province, where the country has most<br />

recently discovered oil.<br />

Looking ahead to 2024, Bayraktar<br />

emphasized the significance of that year for<br />

Turkish Petroleum, as it will mark its 70th<br />

anniversary.<br />

He projected that the TPAO would continue<br />

to elevate its production records and aims<br />

to achieve a daily production milestone of<br />

200,000 barrels.<br />

“This feat would effectively meet<br />

approximately 20% of Türkiye’s energy<br />

requirements,” he said.<br />

Stating that Şırnak has become an<br />

important center for Türkiye and the<br />

<strong>September</strong> <strong>2023</strong> 22

world oil markets, Bayraktar said: “Şırnak<br />

is turning into a very important oil center<br />

with the discoveries we have made<br />

recently. It is a recourse to its origin. Şırnak<br />

has always been an important oil center<br />

since the 1970s. The route is one of the<br />

routes through which the Iraq-Türkiye<br />

pipeline passes.”<br />

Referring to PKK terrorism in the region,<br />

he said that regions that were once<br />

synonymous with terrorism, such as Gabar,<br />

Kato and Bestler-Dereler regions, are now<br />

associated with oil.<br />

“This region has become the region<br />

of peace, tranquility and oil. These<br />

regions were cleared of terrorism with<br />

the determined, persistent stance and<br />

struggle of the Republic of Türkiye. All of<br />

our institutions, especially our governors,<br />

local administrators, relevant institutions,<br />

security forces, gendarmerie, police and<br />

military, have made these regions truly<br />

peaceful and livable.”<br />

“Right after that, we continued the<br />

work we started in oil and natural gas<br />

exploration here, and we started to get<br />

results from them,” he said.<br />

Türkiye’s daily output has topped 70,000<br />

barrels, the TPAO said most recently,<br />

adding: “With our discoveries, we have<br />

exceeded the highest domestic daily<br />

production level in the last 32 years.”<br />

Türkiye, in early May, announced it had<br />

discovered 1 billion barrels of oil in a field<br />

in the southeast province of Şırnak, the<br />

largest onshore oil find in the country.<br />

TPAO has drilled 2,771 meters (9,091 feet)<br />

deep and found an over 162-meter light<br />

oil-bearing reservoir, with further prospects<br />

to be explored in the area.<br />

The country discovered 150 million barrels<br />

of oil in the southeast’s Mount Gabar area<br />

in December 2022.<br />

President Recep Tayyip Erdoğan had<br />

dubbed it “one of the top ten onshore<br />

discoveries in 2022” and said it was valued<br />

at approximately $12 billion.<br />

Türkiye, which has little oil and gas, imports<br />

nearly all its energy needs. The country<br />

consumed 246 million barrels of imported<br />

crude oil in 2022, besides 29 million barrels<br />

of locally produced crude oil, according to<br />

official data.<br />

<strong>September</strong><br />

<strong>2023</strong><br />


Hafize Gaye Erkan, Governor of CBRT.<br />

Tightening to<br />

continue until<br />

inflation outlook<br />

improves<br />

The monetary tightening process, which<br />

began with a sharp post-election rate hike,<br />

is expected to continue until a significant<br />

improvement is achieved in the inflation<br />

outlook, Türkiye’s central bank said.<br />

The guidance was given in minutes of the<br />

bank’s June 22 policy meeting, where it<br />

hiked its main interest rate by 650 basis<br />

points to 15%. After a two-year easing cycle,<br />

the Central Bank of the Republic of Türkiye<br />

(CBRT) said the policy reversal was the first<br />

step of a tightening process initiated to<br />

establish disinflation as soon as possible.<br />

“The deterioration in price stability<br />

threatens macroeconomic stability and<br />

especially financial stability. Accordingly,<br />

the committee decided to implement a<br />

monetary tightening process, the steps of<br />

which are gradually strengthened when and<br />

as necessary,” the central bank said.<br />

“The monetary tightening process is<br />

expected to continue until a significant<br />

improvement is achieved in the inflation<br />

outlook,” it said in a Turkish version of<br />

minutes of its monetary policy committee<br />

meeting. The rate hike came in the first<br />

policy meeting under the new Governor,<br />

Hafize Gaye Erkan. Before that, the oneweek<br />

repo rate had dropped to 8.5% from<br />

19% in 2021. Annual inflation fell below 40%<br />

in May after touching a 24-year high above<br />

85% in October last year.<br />

“The committee evaluated that the current<br />

monetary policy framework is far from<br />

achieving the 5% inflation target, given the<br />

inflation outlook and upside risks,” the bank<br />

said.<br />

<strong>September</strong> <strong>2023</strong> 28

France presses<br />

China on<br />

market access,<br />

lobbies for EV<br />

investment<br />

France said it had pressed Chinese<br />

leaders to open their markets wider<br />

to foreign companies and lobbied for<br />

electric car investment, as the European<br />

Union’s second-largest economy followed<br />

Washington in reviving post-COVID<br />

economic talks amid tension over Beijing’s<br />

surging trade surpluses.<br />

French Finance Minister Bruno Le Maire<br />

also defended Paris’s controls on foreign<br />

access to technology after authorities<br />

said two Chinese citizens are under<br />

investigation for what news reports say<br />

is possible smuggling of French-made<br />

processor chips with military uses to China<br />

and Russia.<br />

Le Maire met with Vice Premier He Lifeng,<br />

Beijing’s top envoy on economic issues. He<br />

followed Treasury Secretary Janet Yellen,<br />

who visited Beijing on July 9-10 as part of<br />

U.S. efforts to revive frosty relations with<br />

China.<br />

Chinese officials gave Le Maire and Yellen<br />

a warm welcome as part of efforts to<br />

reverse an economic slump by reviving<br />

foreign investor interest. But Beijing has<br />

given no indication of possible changes<br />

in technology and other policies that<br />

its trading partners say violate Chinese<br />

market-opening commitments.<br />

Officials of the 27-nation European Union<br />

are trying to narrow a trade deficit with<br />

China that swelled to 396 billion euros<br />

($432 billion) last year. Le Maire cited<br />

cosmetics, aerospace and agriculture as<br />

possible areas for more French exports.<br />

“There is a need to improve access to the<br />

Chinese market. I think it was at the core<br />

of our discussions,” Le Maire said in an<br />

interview at the French Embassy. “We want<br />

to have a stronger economic relationship<br />

between Europe and China, between<br />

France and China, which means to get<br />

access for all European goods.”<br />

Chinese leader Xi Jinping’s government has<br />

looked to Europe as an alternative market<br />

and source of technology since Washington<br />

tightened controls on access to U.S.<br />

processor chips and other high-tech goods<br />

and hiked tariffs on imports from China<br />

in a feud over its industry development<br />

ambitions.<br />

Le Maire and Chinese officials pledged to<br />

cooperate on climate change, financing for<br />

developing countries and nuclear power.<br />

They announced plans to set up a group<br />

to settle a dispute over access to China’s<br />

market for cosmetics, a major French<br />

export.<br />

Le Maire also lobbied for investment from<br />

China’s fast-growing electric car industry.<br />

He was due to fly to the southern city of<br />

Shenzhen to meet Wang Chuanfu, founder<br />

of BYD Auto, one of the world’s biggest<br />

electric vehicle (EV) producers. BYD Auto<br />

and other Chinese brands are starting to<br />

sell in developed markets including Europe<br />

and Japan. Chinese battery supplier CATL<br />

has set up a factory in Germany to supply<br />

automaker BMW.<br />

“We want China to make investments<br />

in France in electric vehicles,” Le Maire<br />

said. “In the climate transition, there is a<br />

place for Chinese investment in France,<br />

which allows us to reinforce our economic<br />

relations and also speed up action against<br />

global warming.”<br />

The talks were overshadowed by Russia’s<br />

war against Ukraine and complaints<br />

China might be helping Moscow evade<br />

Western sanctions, but Le Maire said<br />

he didn’t discuss the war with Chinese<br />

officials. However, he said it was in Beijing’s<br />

interest to end the 17-month-old war.<br />

President Emmanuel Macron’s security<br />

adviser, Emmanuel Bonne, said China was<br />

delivering “military equipment” to Russia<br />

but gave no details.<br />

“I want to make very clear that we want<br />

this war to go to an end as soon as<br />

possible,” Le Maire said. “Indeed, (it is) in<br />

the interest of China, it is in the interests of<br />

the global growth to have peace as soon as<br />

possible.”<br />

Le Maire also defended French controls on<br />

technology exports and foreign investment<br />

in the high-tech industry. French<br />

authorities are investigating two Chinese<br />

citizens associated with chip producer<br />

Ommic who the newspaper Le Parisien said<br />

face possible charges of exporting chips to<br />

a Chinese armaments maker using forged<br />

documents.<br />

French counter-espionage officials believe<br />

a Chinese investor who bought control<br />

of Ommic in 2018 was trying to transfer<br />

chip manufacturing technology to China,<br />

according to the newspaper. The ruling<br />

Communist Party is trying to develop its<br />

own chip industry, but Washington has<br />

blocked access to advanced manufacturing<br />

tools and persuaded allies Japan and<br />

the Netherlands to impose their own<br />

restrictions.<br />

Chinese authorities complain their<br />

companies are unfairly targeted by<br />

restrictions on access to foreign technology.<br />

They have warned curbs on access to<br />

semiconductors will disrupt smartphones<br />

and other industries.<br />

“Everybody can understand that France<br />

wants to protect its key technologies,” Le<br />

Maire said. “We don’t want any foreign<br />

country to get access to those French<br />

sovereign technologies.”<br />

<strong>September</strong> <strong>2023</strong> 30

Togg delivers more than 2,000 cars<br />

The number of Togg vehicles on Türkiye’s roads has exceeded<br />

2,000, Technology and Industry Minister Mehmet Fatih Kacır has<br />

said. Türkiye’s first indigenous electric carmaker delivered more<br />

cars in the first half of August than it did in the whole of July, Kacır<br />

wrote on social media platform X, formerly known as Twitter.<br />

“The production [of Togg cars] will accelerate. The target is to<br />

manufacture a total of 28,000 Togg T10X model vehicles by the end<br />

of the year,” the minister said.<br />

Kacır, together with Treasury and Finance Minister Mehmet Şimşek,<br />

visited the carmaker’s production and innovation campus on Aug. 17.<br />

“The target is to become a global power,” Kacır wrote on X.<br />

Between Aug. 1 and 18, Togg delivered a total of 909 T10X model<br />

cars to customers, while July deliveries were 627.<br />

Until mid-Aug, the company delivered 2,344 vehicles.<br />

Pre-orders for the Togg T10X were taken online from March 16 to<br />

27, and some 177,000 vehicles were sold online. The first buyers of<br />

Togg’s EV model T10 were selected through a digital draw.<br />

In his remarks in July, Kacır said that Togg will produce a total of 1<br />

million vehicles by 2032.<br />

Some 97 percent of those vehicles will be sold to consumers,<br />

while the public institutions will buy the remaining 3 percent, the<br />

minister said at that time.<br />

Kacır also announced that Togg will introduce a new Sedan model<br />

to the market toward the end of 2024.<br />

Türkiye’s electric vehicle market has been growing fast.<br />

In the first seven months of <strong>2023</strong>, electric vehicle sales leaped<br />

nearly 584 percent from a year ago to 17,307, accounting for 3.4<br />

percent of all vehicle sales in the country.<br />

<strong>September</strong> <strong>2023</strong> 32

Teknofest competition turns projects<br />

into innovative initiatives<br />

The world’s largest aviation, space,<br />

and technology festival, Teknofest,<br />

continues to captivate audiences with its<br />

groundbreaking achievements.<br />

Following its record-breaking success in<br />

Istanbul, which attracted 2.5 million visitors<br />

in April, Teknofest is set to make its mark in<br />

the capital Ankara on Oct. 1, <strong>2023</strong>, before<br />

heading to the western province of Izmir.<br />

The festival, known for celebrating science,<br />

technology and space exploration, is<br />

now evolving into a platform that fosters<br />

an entrepreneurial spirit and drives<br />

innovation, aiming to transform projects<br />

into viable startups.<br />

Teknofest’s mission is to unite millions of<br />

individuals under the vision of a “National<br />

Technology Move” to achieve complete<br />

technological independence for Türkiye.<br />

In pursuit of this vision, the festival will<br />

witness the development of projects in 10<br />

distinct categories that have the potential<br />

to evolve into entrepreneurial ventures.<br />

These categories include Education<br />

Technologies, Health and Wellness<br />

Technologies, Transportation and Mobility<br />

Technologies, Agricultural Technologies,<br />

Communication and Communication<br />

Technologies, Tourism Technologies,<br />

Environment, Energy and Climate<br />

Technologies, Space, Aviation and Defense<br />

Technologies, Disaster Management<br />

Technologies and Barrier-Free Living<br />

Technologies.<br />

The Teknofest Enterprise competition<br />

invites high school, university and<br />

advanced-level teams that have<br />

participated in previous competitions<br />

held between 2018 and <strong>2023</strong> to showcase<br />

their innovative ideas. Divided into two<br />

phases, Pre-Incubation and Acceleration,<br />

the competition aims to support both<br />

startups in early stages and teams that<br />

have progressed to product development<br />

and company<br />

establishment.<br />

In the Pre-<br />

Incubation<br />

category, teams<br />

with startup<br />

ideas or those<br />

currently<br />

developing<br />

their products<br />

will be<br />

evaluated.<br />

The primary requirement at this stage is<br />

the demonstration of progress without a<br />

specific need for venture establishment or<br />

incorporation. Moving to the Acceleration<br />

phase, teams that have successfully<br />

transformed their projects into tangible<br />

products and established companies<br />

associated with these ventures will present<br />

their innovations for evaluation.<br />

Teknofest, with its commitment<br />

to integrating participants into the<br />

entrepreneurial ecosystem, strives<br />

to facilitate the commercialization of<br />

technology competition projects and<br />

their subsequent impact on society. In<br />

recognition of the potential of these<br />

projects to fuel the National Technology<br />

Move and transform into successful<br />

startups, a generous prize pool of over TL<br />

7 million ($268,901) will be awarded to<br />

deserving participants.<br />

<strong>September</strong> <strong>2023</strong> 34

Europe’s electric car market share<br />

overtakes diesel in June<br />

The sales of new electric battery vehicles<br />

overtook diesel car purchases in Europe for<br />

the first time, but activity is far from prepandemic<br />

levels, a lobby group said.<br />

In June, the market share for cars running<br />

on electric batteries rose to 15.1%,<br />

according to the European Automobile<br />

Manufacturers’ Association (ACEA), with<br />

over 158,000 units sold in the EU.<br />

Most EU markets recorded double or<br />

even triple-digit percentage gains, with<br />

heavyweights Germany, France and the<br />

Netherlands all posting increases of over<br />

50%. Petrol remained the new car fuel type<br />

with the largest market share at 36.3%,<br />

while hybrid electric vehicles were second<br />

at 24.3%. Automakers and consumers<br />

are looking to steer away from vehicles<br />

running on polluting fossil fuels to reduce<br />

greenhouse gas emissions and fight climate<br />

change.<br />

A searing heatwave that has engulfed large<br />

parts of Europe has reinforced concerns<br />

about the impact of global warming on<br />

the planet. The ACEA said new EU car<br />

registrations in the first six months of<br />

<strong>2023</strong> increased by 17.9%, with 5.4 million<br />

new units. But it noted that cumulative<br />

volumes for the period were 21% lower<br />

than in 2019, the final full year before the<br />

coronavirus pandemic, which upended<br />

the industry and the global economy.<br />

Lockdowns and restrictions on daily<br />

life decimated economic activity, while<br />

the reopening of economies saw the<br />

industry challenged by disrupted supply<br />

chains and inflation. A 17.8% growth<br />

of the car market in the EU in June was<br />

due to a low comparison base last year,<br />

“primarily driven by vehicle component<br />

shortages,” said the ACEA. However, “the<br />

recent improvements indicate that the<br />

European automotive industry is recovering<br />

from supply disruptions caused by the<br />

pandemic,” it added.<br />

<strong>September</strong> <strong>2023</strong> 36

Türkiye logs larger-than-expected<br />

current account surplus in June<br />

Türkiye’s current account in June registered<br />

a surplus for the first time in almost two<br />

years, official data showed, driven partly by<br />

robust tourism and lower energy bills.<br />

The balance registered a surplus of $674<br />

million (TL 18.23 billion), swinging from<br />

a $7.84 billion deficit in May, the Central<br />

Bank of the Republic of Türkiye (CBRT) said.<br />

It marked the first surplus since October<br />

2021. The figure came in larger than<br />

expected by market surveys. A forecast in<br />

a Reuters poll was for a surplus of around<br />

$426 million. An Anadolu Agency (AA)<br />

survey forecasted a surplus of $422 million.<br />

Excluding gold and energy, the two main<br />

drivers of the deficit so far, the balance<br />

registered a net surplus of $5.58 billion in<br />

June, the central bank data showed.<br />

The trade gap came in at $3.69 billion,<br />

while the services industry posted a net<br />

surplus of $5.02 billion. Travel items, under<br />

services, recorded a net inflow of $4.2<br />

billion.<br />

Primary income recorded a net outflow of<br />

$799 million, whereas secondary income<br />

indicated a net inflow of $151 million, the<br />

bank said. In June, direct investments saw a<br />

net inflow of $135 million.<br />

The balance was expected to improve<br />

on seasonal factors, including a lower<br />

energy import bill, high tourism income<br />

and monetary tightening that started after<br />

the May elections. President Recep Tayyip<br />

Erdoğan’s government has orchestrated a<br />

U-turn away from policies based on interest<br />

rate cuts that had been accompanied by<br />

a steep fall in the Turkish lira and soaring<br />

inflation. Since June, the country’s central<br />

bank has reversed and hiked its policy rate<br />

by 900 basis points to address inflation,<br />

which leaped to a 25-year high above 85%<br />

last year but subsequently eased to as low<br />

as 38.21% in June. It rose again to nearly<br />

48% due to the lira’s decline and various<br />

tax hikes and officials have acknowledged<br />

it would rise further toward the year-end.<br />

CBRT Governor Hafize Gaye Erkan said the<br />

impact of the monetary tightening cycle<br />

would result in an improvement in the<br />

current account in the second half of <strong>2023</strong>.<br />

In 2022, Türkiye’s current account deficit<br />

was at nearly $48.77 billion.<br />

<strong>September</strong> <strong>2023</strong> 38

Türkiye’s automotive industry growing dynamically<br />

The foundation of Türkiye’s automotive<br />

industry dates back to the early 1960s.<br />

During a period of rapid industrialization<br />

and progress, this key sector transformed<br />

itself from assembly-based partnerships<br />

to a full-fledged industry with design<br />

capability and massive production<br />

capacity. Since 2003, original equipment<br />

manufacturers (OEM) have invested<br />

over USD 17 billion in their operations in<br />

Türkiye. These investments significantly<br />

expanded their manufacturing capabilities,<br />

which in turn led Türkiye to become an<br />

important part of the global value chain<br />

of international OEMs. Meeting and<br />

exceeding international quality and safety<br />

standards, today’s Turkish automotive<br />

industry is highly efficient and competitive<br />

thanks to value-added production.<br />

As part of its commitment to transforming<br />

its automotive industry, which has<br />

historically been a key economic driver<br />

in integrating the Turkish economy with<br />

the global value chain, and to its vision of<br />

making Türkiye an economic powerhouse,<br />

Türkiye has introduced its own locallydeveloped<br />

born-electric car built upon<br />

strength stemming from the country’s longstanding<br />

know-how in the area.<br />

Accordingly, Türkiye’s Automobile Joint<br />

Venture Group, known as Togg, will<br />

produce five different models on a joint<br />

platform with fully-owned intellectual and<br />

industrial property rights by 2030.<br />

Leveraging a competitive and highly-skilled<br />

workforce combined with a dynamic<br />

local market and favorable geographical<br />

location, the vehicle production of 8 global<br />

OEMs in Türkiye has increased by almost<br />

five times from 300,000s in 2002 to over<br />

1.3 million units in 2022. This represents a<br />

compound annual growth rate (CAGR) of<br />

around 6 percent during that period.<br />

• Significant growth posted by Türkiye’s<br />

automotive sector led to the country’s<br />

becoming the 13th largest automotive<br />

manufacturer in the world and 4th largest<br />

in Europe by the end of 2022.<br />

•Türkiye has already become a center of<br />

excellence, particularly with respect to the<br />

production of commercial vehicles. By the<br />

end of 2022, Türkiye was the number one<br />

producer of commercial vehicles (CVs) in<br />

Europe.<br />

• Proven as a production hub of excellence,<br />

the Turkish automotive industry is now<br />

aiming at improving its R&D, design, and<br />

branding capabilities. As of 2022, 156<br />

R&D and design centers belonging to<br />

automotive manufacturers and suppliers<br />

are operational in Türkiye.<br />

• Notable examples of global brands<br />

with product development, design,<br />

and engineering activities in Türkiye<br />

include Ford, Fiat, Daimler, AVL, and<br />

FEV. Ford Otosan’s R&D center is one of<br />

Ford’s three largest global R&D centers,<br />

while Fiat’s R&D center in Bursa is the<br />

Italian company’s only center serving<br />

the European market outside its home<br />

country. Meanwhile, Daimler’s R&D center<br />

in Istanbul complements the German<br />

company’s truck and bus manufacturing<br />

operations in Türkiye. AVL Türkiye, which<br />

opened up its 2nd R&D center in Türkiye,<br />

develops autonomous and hybrid vehicle<br />

technologies.<br />

• Türkiye offers a supportive environment<br />

on the supply chain side. There are around<br />

1,100 component suppliers supporting the<br />

production of OEMs. With the parts going<br />

directly to the production lines of vehicle<br />

manufacturers, the localization rate of<br />

OEMs varies between 50 and 70 percent.<br />

•Türkiye is home to many global suppliers.<br />

There are more than 250 global suppliers<br />

that use Türkiye as a production base, with<br />

30 of them ranking among the 50 largest<br />

global suppliers.<br />

• Auto manufacturers increasingly choose<br />

Türkiye as a production base for their export<br />

sales. This is evidenced by the fact that 73<br />

percent of vehicle production in Türkiye<br />

was destined for international markets in<br />

2022. Türkiye exported more than 950,000<br />

vehicles to international markets in the<br />

same year. In addition, Türkiye has been the<br />

number one vehicle exporter to European<br />

markets for around a decade.<br />

<strong>September</strong> <strong>2023</strong> 40

Exporters confident $265 bln target within reach<br />

Encouraged by the steps the new economic<br />

team has taken over the past two and a half<br />

months, Türkiye’s exporters have voiced<br />

optimism that the target of generating $265<br />

billion in export revenues appears to be<br />

within reach.<br />

The increase in the foreign exchange rates,<br />

albeit limited, came as a relief to exporters,<br />

said Mustafa Gültepe, the president of the<br />

Turkish Exporters’ Assembly (TİM), noting<br />

that the rates had remained flat for a long<br />

period of time.<br />

Gültepe noted that there have been positive<br />

developments in exporters’ access to<br />

financing.<br />

The daily limit for rediscount credits was<br />

raised to 1.5 billion Turkish Liras, while the<br />

small and medium-sized enterprises’ (SMEs)<br />

share in rediscount loans was increased,<br />

Gültepe said.<br />

“We welcome the Central Bank’s decision<br />

that export loans will be exempt from<br />

credit restring measures…We see all those<br />

measures as important steps taken toward<br />

helping to reach the export targets.”<br />

They expect monetary tightening policies to<br />

remain in place for some more time in the<br />

U.S. and Europe, Gültepe said.<br />

“However, we also anticipate that the<br />

economic activity will recover in those<br />

regions in the final quarter of the year. The<br />

recovery in our main export markets will<br />

boost our exports.”<br />

Gültepe recalled that Türkiye has set a<br />

target of generating $265 billion in export<br />

revenues this year.<br />

“We will make all the efforts in the<br />

remaining five months of the year and meet<br />

this target,” he said, adding that despite the<br />

February earthquakes and the stagnation<br />

in export markets, the Turkish economy is<br />

continuing to grow.<br />

The textile and apparel industries are key<br />

exporting sectors, Gültepe noted.<br />

The two sectors collectively generate<br />

around $32 billion in export revenues,<br />

according to Gültepe. “We set mediumterm<br />

export targets of $40 billion and $20<br />

billion for the apparel and textile industries,<br />

respectively. With our brands and the skilled<br />

workforce, we have the potential to achieve<br />

this target.” Türkiye’s exports amounted<br />

to $143 billion in the first seven months of<br />

<strong>2023</strong>, declining slightly from $144 billion<br />

in export revenues generated in the same<br />

period of last year. In June alone, exports<br />

grew by 8.4 percent year-on-year to $20<br />

billion, with the automotive, chemicals and<br />

textile sectors accounting for $2.7 billion,<br />

$2.1 billion and $16 billion, respectively, of<br />

all export revenues. From January to July,<br />

the country’s imports rose by 5.1 percent<br />

annually to hit $217 billion. The foreign<br />

trade deficit widened 18.2 percent yearon-year<br />

to $73.6 billion in the first seven<br />

months of <strong>2023</strong>.<br />

<strong>September</strong> <strong>2023</strong> 42

China calls<br />

West’s economic<br />

de-risking ‘false<br />

proposition’<br />

Chinese Premier Li Qiang slammed efforts<br />

in the West to “de-risk” their economies as<br />

a “false proposition”, hitting back against<br />

U.S. and EU policy aimed at reducing their<br />

reliance on China.<br />

The United States and the European Union<br />

have in recent months moved to “de-risk”<br />

from the world’s second-largest economy.<br />

“In the West, some people are hyping up<br />

what is called ‘cutting reliance and derisking’,”<br />

Li told delegates at the opening<br />

of a World Economic Forum meeting in<br />

northern China.<br />

“These two concepts... are a false<br />

proposition, because the development of<br />

economic globalisation is such that the<br />

world economy has become a common<br />

entity in which you and I are both<br />

intermingled,” he said.<br />

“The economies of many countries are<br />

blended with each other, rely on each<br />

other, make accomplishments because of<br />

one another, and develop together,” he<br />

added.<br />

“This is actually a good thing, not a bad<br />

thing.”<br />

Meeting of the World Economic Forum in<br />

the port city of Tianjin - known colloquially<br />

as the “Summer Davos” - is the first of<br />

its kind after a three-year hiatus caused<br />

by the Covid pandemic. It will last until<br />

tommorow.<br />

European Commission President Ursula von<br />

der Leyen in January described the EU’s<br />

approach to China as “de-risking rather<br />

than decoupling” since the bloc still sought<br />

to work and trade with Beijing.<br />

And President Joe Biden has kept former<br />

leader Donald Trump’s hard line on<br />

China, and in some areas gone further,<br />

including banning exports of high-end<br />

semiconductors to the rising power.<br />

Responding to Beijing’s heated criticism<br />

of the move, Secretary of State Antony<br />

Blinken in Beijing insisted that the<br />

United States was not seeking “economic<br />

containment” of China.<br />

“But at the same time,” he said, “it’s not in<br />

our interest to provide technology to China<br />

that could be used against us.”<br />

Five percent growth<br />

China is on course to achieve its five<br />

percent target for economic growth in <strong>2023</strong><br />

set by Beijing earlier this year, Li also told<br />

the audience at the forum, which is being<br />

attended by leaders from New Zealand,<br />

Mongolia, Vietnam and Barbados, as well<br />

as a large delegation from Saudi Arabia.<br />

“For the whole year, we are expected to<br />

achieve the target of about five percent<br />

economic growth set at the beginning of<br />

this year,” Li said.<br />

“We are fully confident and capable of<br />

pushing ahead the steady and long-term<br />

development of China’s economy on the<br />

track of high-quality development in the<br />

relative long term.”<br />

China is grappling with a slowing post-<br />

Covid recovery, with a number of lacklustre<br />

indicators signalling the rebound is running<br />

out of steam. Beijing’s central bank cut two<br />

key interest rates in a bid to counter the<br />

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

economy.<br />

<strong>September</strong> <strong>2023</strong> 44

EVE Energy announces to bring its flagship power<br />

cell solutions to IAA Mobility <strong>2023</strong>, marking its 5th<br />

anniversary of the first international cell order<br />

EVE Energy, a leading global lithium-ion<br />

battery manufacturer in its fifth year of its<br />

first international power battery order, will<br />

make its IAA Mobility debut in <strong>September</strong>.<br />

At the IAA Mobility <strong>2023</strong> exhibition,<br />

EVE Energy will showcase its power cell<br />

solutions for passenger vehicles that build<br />

on cylindrical and prismatic technical<br />

routes. The Company will show the entire<br />

life chain of cylindrical products, from raw<br />

materials to cells, systems, and battery<br />

recycling, while presenting high- and lowvoltage<br />

prismatic products.<br />

Over the past decade, EVE Energy has<br />

achieved remarkable success in expanding<br />

its international power cell business,<br />

signing and delivering over millions worth<br />

of orders. Lexy Liu, the GM of International<br />

OEM Department at EVE Energy,<br />

recently marked the occasion by sharing<br />

insights into the company’s outstanding<br />

performance, emphasizing the spirit of<br />

continuous learning, teamwork, and a cando<br />

attitude.<br />

Lexy, who has played a pivotal role in<br />

the company’s international business<br />

development, attributes its success to a<br />

strong team spirit. “Teamwork is crucial in<br />

achieving our goals,” Lexy said. “We work<br />

together, learn from our customers and our<br />

colleagues, and leverage our personal and<br />

corporate experiences to drive continuous<br />

improvement.”<br />

Lexy acknowledged that every project<br />

required meticulous planning and<br />

coordination among various teams within<br />

the company. The collaboration between<br />

sales and project teams was essential to<br />

provide comprehensive solutions and<br />

secure contracts. To further enhance<br />

its international business, EVE Energy<br />

established the International OEM<br />

Department in December 2021.<br />

Looking ahead, EVE Energy is focused on<br />

growing its global reach and deepening<br />

relationships with current customers while<br />

exploring new opportunities in emerging<br />

markets. With its advanced technology<br />

and expertise, EVE Energy is committed to<br />

contributing to sustainable transportation<br />

and providing dependable energy storage<br />

solutions worldwide.<br />

Lexy ‘s personal career and academic<br />

background played an instrumental role<br />

in her professional development and<br />

have contributed to the success of EVE<br />

Energy. She holds a bachelor’s degree in<br />

Printing Technology from Xi’an University<br />

of Technology and completed a two-year<br />

exchange program with Stuttgart Media<br />

University. This experience instilled in her a<br />

solid foundation covering German language<br />

and culture, as well as exposure to multiple<br />

renowned automotive manufacturers<br />

headquartered in Stuttgart. Lexy further<br />

pursued her studies in Germany,<br />

specializing in printed electronic products,<br />

including keyboards, audio systems, and<br />

solar cells. Her involvement in battery,<br />

coating, and sales-related projects enabled<br />

her to gain valuable insights into the<br />

lithium-ion battery industry.<br />

While Lexy was doing her master’s degree<br />

at TU Chemnitz, she also worked as an<br />

assistant researcher at Laser Zentrum<br />

Hannover. This experience brought her<br />

a desire for stability in her life. Once she<br />

achieved that stability, she felt a yearning<br />

for new challenges. That’s when she<br />

decided to join EVE Energy. With her sales<br />

expertise and fluency in German, she was<br />

confident that she could help the company<br />

expand its international business.<br />

Transitioning from a research background<br />

to a sales role at EVE Energy, Lexy found<br />

great satisfaction in sharing her ideas and<br />

perspectives with customers. Her previous<br />

experience in product development and<br />

interaction with customers as a product<br />

manager prepared her well for this role.<br />

Lexy mentioned, “I frequently meet with<br />

customers and engage in discussions that<br />

transitioned from technical solutions<br />

to commercial proposals. Although<br />

the content may differ, the essence<br />

of closing deals remains the same. It<br />

involves understanding customer needs<br />

and delivering projects that meet their<br />

requirements.”<br />

Looking back on the success of the<br />

International OEM Department at EVE<br />

Energy, Lexy expressed her sincere<br />

gratitude for the team’s unwavering<br />

commitment and the company’s impressive<br />

expansion. She emphasized the initial<br />

obstacles the team encountered while<br />

entering the global market, underscoring<br />

the crucial role of a cohesive team effort.<br />

EVE Energy’s overall business development<br />

strategy goal is to gain 10% of the<br />

market share, and the international OEM<br />

department in Europe also holds the<br />

same expectation. On May 9 and May 12,<br />

the Company officially announced the<br />

construction of green battery factories in<br />

Hungary and Malaysia, showing confidence<br />

on its upcoming international projects.<br />

In the journey towards internationalization,<br />

EVE Energy has always excelled in<br />

cooperation and excellence, showcasing<br />

its top-notch manufacturing and research<br />

capabilities through the concept of “Quality<br />

First.” The Company has consistently<br />

pursued sustainable development, creating<br />

value for customers and society, earning<br />

recognition from leading domestic and<br />

international enterprises in multiple<br />

segments, receiving perfect ratings from<br />

customers, and establishing long-term and<br />

stable strategic partnerships.<br />

In the future, EVE Energy will continue<br />

to provide customers with higher-quality<br />

products and services, striving to become<br />

the most innovative leader in the lithium<br />

battery industry, and making outstanding<br />

contributions to global sustainable<br />

development.<br />

<strong>September</strong> <strong>2023</strong> 46

Foreign trade deficit down 34.5 percent<br />

Türkiye’s foreign trade deficit has dropped<br />

by 34.5 percent in June, according to data<br />

announced on July 3 by the Trade Ministry.<br />

“This figure is higher than the average<br />

monthly exports in the first five months<br />

of <strong>2023</strong>. <strong>Exports</strong> of $20.9 billion in June<br />

<strong>2023</strong> represents a decrease of 10.5<br />

percent compared to June 2022. Thus,<br />

our six-month exports in the first half<br />

of <strong>2023</strong> amounted to $123.4 billion,”<br />

it added.According to data, Türkiye’s<br />

imports fell 16.8 percent to $26.3 billion<br />

in June <strong>2023</strong>, the lowest level in 20<br />

months.<br />

“The decline in imports was mainly due<br />

to a decrease in non-calendar energy<br />

imports, and total energy imports fell by<br />

45.3 percent to $4.4 billion in June,” said<br />

the ministry. The fall in imports helped<br />

lower the foreign trade deficit. “With the<br />

realization of our exports at the level of<br />

$21 billion and the noticeable decrease<br />

in imports, Türkiye’s foreign trade deficit<br />

decreased by 34.5 percent to $5.4 billion,”<br />

said the Trade Ministry in its statement.<br />

“The ratio of exports to imports was 79.5<br />

percent in June <strong>2023</strong>, with an increase<br />

of 16.1 points compared to the previous<br />

month, approaching 80 percent after 19<br />

months, and was an important indicator<br />

of the positive trend in the foreign trade<br />

balance,” it added. According to official data,<br />

Türkiye’s exports in the first half of the year<br />

were $52 billion to the EU-27, $10 billion<br />

to Africa, $10.6 billion to the Americas and<br />

$20.7 billion to the Middle East.<br />

<strong>September</strong> <strong>2023</strong> 48

Crisis hits China’s auto sector as<br />

EV price war takes toll on workers<br />

When Shanghai suffered a heat wave in<br />

June, the car factory where Mike Chen<br />

worked transitioned its production to the<br />

night shifts and reduced air conditioning.<br />

For Chen, toiling through the early hours<br />

in his sweat-soaked uniform was the latest<br />

slap in the face after cuts in bonuses and<br />

overtime slashed his monthly pay this<br />

year to little more than a third of what he<br />

earned when he was hired in 2016.<br />

Chen, 32, who works for a joint venture<br />

between China’s state-owned car giant<br />

SAIC and Germany’s Volkswagen, is far<br />

from alone. Millions of auto workers and<br />

suppliers in China are feeling the heat as an<br />

electric vehicle price war forces carmakers<br />

to shave costs anywhere they can.<br />

“SAIC-VW used to be the best employer<br />

and I felt honored to work here,” said Chen.<br />

“Now I just feel angry and sad.”<br />

The price war triggered by Tesla has sucked<br />

in more than 40 brands, shifted demand<br />

away from older models and forced some<br />

automakers to curb production of both<br />

EVs and combustion-engine cars or shut<br />

factories altogether.<br />

Reuters interviews with 10 executives of<br />

carmakers and auto parts suppliers, as<br />

well as seven factory workers, point to a<br />

broader industry in distress, with pennypinching<br />

on everything from components<br />

to electricity bills to wages – which is, in<br />

turn, hitting spending elsewhere in the<br />

economy.<br />

Asked about the SAIC-VW plant where<br />

Chen works, which makes combustionengine<br />

cars, VW said pay at joint ventures<br />

varied based on working hours and<br />

bonuses. It said making cars at night<br />

eased the burden on power grids and that<br />

healthy, good working conditions were a<br />

high priority. SAIC did not respond.<br />

Economists warn that China’s auto sector<br />

could even become a drag on economic<br />

growth because of the fallout from<br />

the price war, which would be a stark<br />

turnaround for a car industry that is by far<br />

the world’s biggest.<br />

The problem is that while there has been<br />

huge investment in production capacity,<br />

helped by large state subsidies, domestic<br />

demand for cars has stagnated and<br />

household incomes remain under pressure,<br />

economists say.<br />

In the first seven months of <strong>2023</strong>, China<br />

sold 11.4 million cars at home and<br />

exported 2 million, but growth came<br />

almost entirely from abroad. <strong>Exports</strong><br />

leaped 81%, but domestic sales only crept<br />

1.7% higher – despite the widespread price<br />

cuts.<br />

“The focus on production and supply is<br />

lopsided,” said George Magnus, research<br />

associate at Oxford University’s China<br />

Center, adding that inadequate attention<br />

to demand ultimately leads to inventory<br />

overhang, price cuts and financial stress.<br />

“China really has to learn to walk on two<br />

legs.”<br />

Chinese plants were already far from<br />

running at full tilt when Tesla first cut prices<br />

in October last year and then again in<br />

January. CEO Elon Musk has since doubled<br />

down on his strategy with more cuts<br />

announced.<br />

Including factories making combustionengine<br />

cars, China had the capacity to<br />

produce 43 million vehicles a year at the<br />

end of 2022, but the plant utilization rate<br />

was 54.5%, down from 66.6% in 2017,<br />

China Passenger Car Association (CPCA)<br />

data show.<br />

At the same time, pay cuts and lay-offs in<br />

the auto industry and its suppliers – which<br />

employ an estimated 30 million people<br />

<strong>September</strong> <strong>2023</strong> 52

according to Chinese state media – are<br />

hitting living standards at a time when<br />

Beijing desperately wants to lift consumer<br />

confidence from near record lows.<br />

Cutting salaries is illegal in China, but<br />

complex pay structures offer ways around<br />

this.<br />

SAIC-VW, for example, reduced Mike Chen’s<br />

take-home pay by reducing working hours<br />

and cutting bonuses without tinkering with<br />

his base pay, which typically covers up to<br />

half the compensation workers expect<br />

when they join.<br />

BYD, China’s largest EV maker, advertised a<br />

position in August at its Shenzhen factory<br />

with an estimated monthly income of<br />

5,000-7,000 yuan, but the base salary was<br />

2,360 yuan ($324).<br />

The average monthly wage in China<br />

was 11,300 yuan in June, according to<br />

government data.<br />

A Reuters analysis of the estimated income<br />

included in recent job adverts from 30 auto<br />

firms showed hourly salaries of 14 yuan<br />

($1.93) to 31 yuan ($4.27), with Tesla, SAIC-<br />

GM, Li Auto and Xpeng at the higher end.<br />

Auto worker Liu, 35, said he quit Changan<br />

Automobile’s plant in Hefei in July after<br />

earning 4,000 yuan in both May and June,<br />

rather than the 7,000 he expected each<br />

month. Based on his past experiences,<br />

Liu was confident he would quickly find<br />

another auto job, but the market had<br />

turned.<br />

“The good old days are gone,” said Liu,<br />

speaking on condition of partial anonymity<br />

to protect his job prospects.<br />

Changan Automobile said working hours<br />

and pay varied from worker to worker.<br />

Several automakers, including Mitsubishi<br />

Motors and Toyota, have laid off thousands<br />

in China after sales slumped. Others, such<br />

as Tesla and battery maker CATL, have<br />

slowed hiring as they delayed expansions.<br />

Hyundai and its Chinese partner,<br />

meanwhile, are trying to sell a plant in<br />

Chongqing.<br />

After being rejected by Li Auto and Xpeng,<br />

Liu almost got a job at Chery’s plant in the<br />

eastern port of Qingdao through a labor<br />

agent, but he refused to pay him a 32,000<br />

yuan commission to secure the position.<br />

“Some factories exhaust you and are willing<br />

to pay you more. Some factories exhaust<br />

you but are stingy. Some factories don’t<br />

exhaust you but starve you as salaries are<br />

too low,” Liu said.<br />

“Maybe I’d be better off as a security<br />

worker in some office building.”<br />

It has been a similarly brutal environment<br />

for auto suppliers in China as car prices<br />

have continued to fall, with the weighted<br />

average transaction price of EVs and<br />

hybrids in June down 15% from January<br />

at 185,100 yuan. SAIC-VW, for example,<br />

offered over half a billion dollars in cash<br />

subsidies for car buyers in March and<br />

a discount of just over $5,100 on its<br />

ID.3 electric hatchback for a period in<br />

July. State-run China <strong>Automotive</strong> News<br />

estimates there are over 100,000 auto<br />

suppliers in the country. In a March survey<br />

of nearly 2,000 by auto parts trading<br />

platform Gasgoo, 74% said automakers had<br />

asked them to reduce costs. More than<br />

half were asked for reductions of 5% to<br />

10%, higher than the 3% to 5% targets of<br />

previous years. Nine out of 10 companies<br />

expected more such requests this year.<br />

Suppliers typically negotiate prices once a<br />

year, but many have been pressed to lower<br />

prices every quarter in <strong>2023</strong>, two senior<br />

executives at auto suppliers said.<br />

Before it kicked off the price war, Tesla<br />

sent emails to its direct suppliers,<br />

encouraging them to lower costs by 10%<br />

this year, according to a person with direct<br />

knowledge of the matter.<br />

And in June, a group of small suppliers<br />

wrote to state-owned Changan Automobile<br />

to push back against 10% price reductions.<br />

The EV battery market has also turned,<br />

with suppliers cutting prices for<br />

automakers. CATL, which counts Tesla as its<br />

biggest client, offered smaller domestic EV<br />

makers discounted batteries in February.<br />

Lithium iron phosphate (LFP) batteries,<br />

the type used by Tesla in China, were 21%<br />

cheaper in August than five months ago,<br />

while nickel-cobalt batteries were 9% to<br />

18% cheaper, RealLi Research data show.<br />

When Chen Yudong, head of Bosch’s China<br />

operations, visited one of his biggest<br />

customers in March, he received an<br />

unusual present, a chopping knife with<br />

a message engraved on its sheath: “Cut<br />

decisively through the mess.”<br />

Three months later, he told Reuters that<br />

price cuts had been more aggressive in<br />

<strong>2023</strong> than in previous years. “They’ve<br />

been keeping me awake at night.”<br />

<strong>September</strong><br />

<strong>2023</strong><br />


Honda’s profits double on global sales<br />

Honda reported that its April-June profit<br />

more than doubled on healthy sales of<br />

its motorcycles and cars, as the Japanese<br />

company also received a perk from<br />

favorable exchange rates.<br />

Honda Motor Co. said its fiscal first quarter<br />

profit totaled 363 billion yen ($2.5 billion),<br />

up from 149 billion yen.<br />

Quarterly sales jumped 21 percent to 4.6<br />

trillion yen ($32 billion). Honda’s financial<br />

service division also reported growing<br />

sales.<br />

Honda, which makes the Fit subcompact,<br />

Honda e electric car and Gold Wing<br />

motorcycle, said its profitability improved,<br />

especially in North America, where<br />

production recovered.<br />

Automakers around the world were<br />

slammed by supply shortages because<br />

of production delays related to social<br />

restrictions caused by the COVID-19<br />

pandemic. But such restrictions have<br />

eased, allowing production to pick up<br />

again.<br />

Auto sales were about the same in Japan<br />

in the latest quarter as in the previous<br />

year, while dropping significantly in China<br />

because of intense competition from<br />

makers of battery electric vehicles, Honda<br />

said.<br />

Honda is banking on growth in EVs in the<br />

U.S. market, where it recently announced it<br />

is joining six other companies in the proof<br />

a high-powered charging network across<br />

North America.<br />

Honda said a computer chip shortage<br />

crimped its motorcycle sales in India, while<br />

sales rebounded in Indonesia as production<br />

recovered.<br />

The company said it sold 901,000 vehicles<br />

in the latest quarter, up from 815,000 a<br />

year earlier. It also sold more motorcycles<br />

worldwide at nearly 4.5 million, up from<br />

4.2 million.<br />

<strong>September</strong> <strong>2023</strong> 56

UAE to invest<br />

$54 bln in<br />

energy and<br />

triple renewable<br />

sources<br />

The United Arab Emirates plans to triple its<br />

supply of renewable energy and invest up<br />

to $54 billion over the next seven years to<br />

meet its growing energy demands.<br />

Sheikh Mohammed bin Rashid Al<br />

Maktoum, the UAE’s vice president and<br />

ruler of Dubai, announced the plans on July<br />

4 following a Cabinet meeting.<br />

They also include investments in lowemission<br />

hydrogen fuel and developing<br />

infrastructure for electric vehicles.<br />

He said the updated national energy<br />

strategy “aims to triple the contribution<br />

of renewable energy over the next seven<br />

years and invest 150 billion to 200 billion<br />

dirhams ($40 billion to $54 billion) during<br />

the same period to meet the country’s<br />

growing demand for energy.”<br />

The major oil-producing nation has pledged<br />

to be carbon-neutral by 2050, without fully<br />

explaining how, and is hosting the COP28<br />

climate summit later this year.<br />

The latest announcement included the<br />

formation of an Investment Ministry to be<br />

led by Mohamed Hassan Alsuwaidi.<br />

He currently serves as the deputy chairman<br />

of Masdar, a clean energy firm that has<br />

committed tens of billions of dollars to<br />

worldwide projects. The UAE’s oil wealth<br />

powered its transformation into a major<br />

hub for business and tourism, known for<br />

the futuristic cities of Dubai and Abu Dhabi.<br />

The country requires vast amounts of<br />

energy to power the desalination plants<br />

that irrigate its desert golf courses, air<br />

conditioners that cool its sprawling malls,<br />

and heavy industries such as aluminum<br />

smelters. The UAE has a nuclear power<br />

plant, as well as a large solar park in Dubai<br />

that met 15% of the city’s needs last year,<br />

leaving it mostly reliant on natural gas<br />

imported from Qatar.<br />

<strong>September</strong> <strong>2023</strong> 58

Türkiye becomes partner of Europe’s largest tech fund<br />

The Ministry of Industry and Technology<br />

joined the NATO Innovation Fund, Europe’s<br />

largest technology fund, on behalf of<br />

Türkiye, according to a statement by the<br />

ministry.<br />

The statement said that the ministry<br />

participated in the “NATO Innovation<br />

Fund”, the world’s first multinational<br />

venture capital fund, established at the<br />

Madrid Summit of NATO.<br />

Minister Mehmet Fatih Kacır, whose views<br />

were included in the official statement,<br />

stated that the NATO Innovation Fund<br />

is a great opportunity for Türkiye’s deep<br />

technology start-ups and that the fund will<br />

not only provide long-term investment<br />

support but also access to the markets of<br />

NATO and allied countries.<br />

The 1 billion euro fund, which will finance<br />

technologies that will protect the security<br />

of the Alliance’s 1 billion citizens, is also<br />

Europe’s largest deep technology fund.<br />

The NATO Innovation Fund will play an<br />

active role in strengthening the innovation<br />

ecosystems of the Allies, meeting the<br />

financing needs in deep technologies,<br />

and making the developed technologies<br />

available for use.<br />

The fund will invest in start-ups that<br />

develop technologies such as artificial<br />

intelligence, big data, autonomous<br />

systems, new materials and advanced<br />

manufacturing and quantum, which are<br />

critical to the security of the alliance, and<br />

venture capital funds that support these<br />

technologies.<br />

Türkiye, which is among the 23 allied<br />

countries financing the fund, will be the 6th<br />

largest partner of the fund with financing<br />

of approximately 45 million euros for 15<br />

years.<br />

Together with the North Atlantic Defense<br />

Innovation Accelerator (DIANA), the fund<br />

will have a decisive role in preserving<br />

NATO’s technological superiority and<br />

developing breakthrough technologies<br />

that can be used for civilian and military<br />

purposes.<br />

The NATO Innovation Fund, which was<br />

established as a result of the financial<br />

commitments and hard work of 23 NATO<br />

allies, including Türkiye, was announced to<br />

the public at the Vilnius Summit, attended<br />

by President Recep Tayyip Erdoğan.<br />

<strong>September</strong> <strong>2023</strong> 60

Türkiye’s <strong>2023</strong> H1 sees $4.8B in<br />

foreign direct investments<br />

Türkiye received foreign direct investments<br />

(FDI) worth $4.8 billion (TL 125.9 billion)<br />

in the first half of <strong>2023</strong>, said the head of<br />

Türkiye’s International Investors Association<br />

(YASED).<br />

Some $2.5 billion of these investments<br />

were mergers, acquisitions or capital<br />

inflows, Engin Aksoy, the chairperson of the<br />

association told Anadolu Agency (AA).<br />

“Based on the results of our PULSE survey<br />

conducted with YASED top executives<br />

for the June period, we estimate that<br />

macroeconomic stability and potential<br />

improvements in the regulatory framework<br />

could trigger an additional investment<br />

inflow of at least $7.1 billion in the next six<br />

months,” he noted.<br />

Recalling Türkiye’s target to take a share<br />

of 1.5% from global direct investments, he<br />

said the current situation is now below its<br />

potential.<br />

Aksoy highlighted that since 2002,<br />

European Union countries have taken the<br />

lead with a 59% share in all investments<br />

coming to Türkiye, and this trend has<br />

continued in the first six months of this<br />

year. The EU countries’ share in foreign<br />

direct investments during the first sixmonth<br />

period was at 56%, Aksoy said.<br />

“Among countries, the Netherlands<br />

accounted for 23% of total investment<br />

capital inflows, followed by Russia with<br />

15%, the United Arab Emirates (UAE) with<br />

13%, Germany with 7% and Ireland with<br />

7%. Sectors such as wholesale and retail<br />

trade and electricity production stood out<br />

in the investment capital inflows of the first<br />

six months of <strong>2023</strong>. In addition to these<br />

sectors, investment inflows in the field of<br />

information and communication, which<br />

was prominent last year, also continued,”<br />

Aksoy explained.<br />

Comparing Türkiye to countries like<br />

Poland and Hungary, Aksoy noted that<br />

Türkiye is still attractive due to its tax<br />

incentives compared to other countries.<br />

Additionally, he mentioned that while<br />

Türkiye has not fully utilized its potential, it<br />

holds advantages in areas such as human<br />

resources and infrastructure.<br />

Aksoy stated that as YASED, they<br />

consider the two main factors that play<br />

the most important role in increasing<br />

Türkiye’s competitiveness in terms of<br />

international direct investments are the<br />

provision of a predictable regulatory<br />

framework based on the rule of law and<br />

macroeconomic stability with the vision<br />

of moving the country to the group of<br />

high-income countries. In addition to these<br />

prerequisites, Aksoy mentioned other<br />

topics that are part of the current dynamics<br />

of the global competitive environment<br />

including integration into global supply<br />

chains, achieving digital transformation,<br />

adopting sustainable development and<br />

enhancing human capital.<br />

“I would also like to express that the<br />

members of YASED, which represents<br />

Türkiye’s companies, will continue to<br />

contribute to our country’s sustainable<br />

development with high-value investments,<br />

and any improvement in the investment<br />

environment will result in a net increase in<br />

both existing and new investments.”<br />

<strong>September</strong> <strong>2023</strong> 64

IEA flags risk of higher oil prices, cuts<br />

2024 demand view<br />

The International Energy Agency (IEA) said<br />

OPEC+ supply cuts could erode inventories<br />

in the rest of this year, potentially driving<br />

prices even higher, before economic<br />

headwinds limit global demand growth in<br />

2024.<br />

Tighter supply driven by OPEC+ oil<br />

output cuts and rising global demand has<br />

underpinned a rally in oil prices, with Brent<br />

crude hitting highs of over $88 a barrel, the<br />

highest since January.<br />

The IEA said if OPEC+ current targets are<br />

maintained, oil inventories could draw by<br />

2.2 million barrels per day (bpd) in the third<br />

quarter and 1.2 million bpd in the fourth,<br />

“with a risk of driving prices still higher”.<br />

“Deepening OPEC+ supply cuts have<br />

collided with improved macroeconomic<br />

sentiment and all-time high world oil<br />

demand,” the Paris-based energy watchdog<br />

said in its monthly oil market report.<br />

The Organization of the Petroleum<br />

Exporting Countries (OPEC) and its allies,<br />

together known as OPEC+, began limiting<br />

supplies in late 2022 to bolster the market<br />

and in June extended supply curbs into<br />

2024.<br />

The IEA said that in July, global oil supply<br />

plunged by 910,000 bpd in part due to<br />

a sharp reduction in Saudi output. But<br />

Russian oil exports held steady at around<br />

7.3 million bpd in July, the IEA said.<br />

Next year, demand growth is forecast<br />

to slow sharply to 1 million bpd, the IEA<br />

said, citing lackluster macroeconomic<br />

conditions, a post-pandemic recovery<br />

running out of steam and the burgeoning<br />

use of electric vehicles.<br />

“With the post-pandemic rebound largely<br />

completed and as multiple headwinds<br />

challenge the OECD’s outlook, oil<br />

consumption gains slow markedly,” the IEA<br />

said, referring to Organisation for Economic<br />

Co-operation and Development nations.<br />

The IEA’s demand growth forecast is down<br />

by 150,000 bpd and contrasts with that of<br />

OPEC, which maintained its forecast that oil<br />

demand will rise by a much stronger 2.25<br />

million bpd in 2024.<br />

“The global economic outlook remains<br />

challenging in the face of soaring interest<br />

rates and tighter bank credit, squeezing<br />

businesses that are already having to cope<br />

with sluggish manufacturing and trade,”<br />

the IEA said. For <strong>2023</strong>, the IEA and OPEC<br />

are less far apart. The IEA expects demand<br />

to expand by 2.2 million bpd in <strong>2023</strong>,<br />

buoyed by summer air travel, increased<br />

oil use in power generation and surging<br />

Chinese petrochemical activity. OPEC sees a<br />

rise of 2.44 million bpd.<br />

Demand is forecast to average 102.2 million<br />

bpd this year, the IEA said, with China<br />

accounting for more than 70% of growth,<br />

despite concerns about the economic<br />

health of the world’s top oil importer.<br />

<strong>September</strong> <strong>2023</strong> 66

EU’s carbon tax to impact countries, including Türkiye<br />

The European Union’s major trading<br />

partners, including Türkiye, will be<br />

impacted by the bloc’s carbon tax, experts<br />

have said.<br />

The competition will intensify for the<br />

nations which are slow in preparations to<br />

comply with the carbon tax regulations,<br />

such as Türkiye, China, India, the U.S., the<br />

U.K. and Canada, they warned.<br />

Brussels’s carbon border adjustment<br />

mechanism (CBAM) is set to enter into<br />

force as of Oct. 1. The mechanism aims at<br />

encouraging cleaner industrial production<br />

in non-EU countries in a number of key<br />

industries.<br />

Türkiye is one of the major trading partners<br />

of the EU. The country’s exports to the bloc<br />

are nearly 96 billion euros, and the carbon<br />

tax policy is particularly important for<br />

Türkiye’s cement and steel sectors.<br />

“The CBAM is forcing countries that export<br />

steel, aluminum, cement, fertilizers,<br />

hydrogen and electricity to the EU to<br />

reduce emissions. Türkiye is one of those<br />

nations,” said Ahmet Atıl Aşıcı from Istanbul<br />

Technical University’s Department of<br />

Management Engineering.<br />

Aşıcı recalled that Türkiye ratified the Paris<br />

Agreement in 2021 and pledged to have<br />

net-zero carbon emissions by 2053.<br />

Türkiye can shut down all thermal power<br />

plants by 2035 without putting energy<br />

supply security at risk, according to Aşıcı.<br />

Türkiye has been making preparations<br />

for years against the possibility of the<br />

introduction of the carbon tax and this<br />

should alleviate the financial impact of the<br />

tax on the country, said Fabio Passaro at<br />

Climate Bonds Initiative. The carbon tax will<br />

have a direct impact on several industries,<br />

such as steel and cement, as well as<br />

countries such as Türkiye, the Middle<br />

Eastern and Northern African Nations,<br />

Russia and Morocco, according to Jingwei<br />

Jei at Sustainable Fitch ESG.<br />

<strong>September</strong> <strong>2023</strong> 68

Driverless taxis gain ground in San Francisco<br />

California authorities have taken a major<br />

step forward in expanding driverless taxi<br />

services in San Francisco, giving the green<br />

light for operators Waymo and Cruise to<br />

compete with ride-share services and cabs.<br />

The California Public Utilities Commission<br />

(CPUC) heard six hours of public comment<br />

before voting three-to-one to let Waymo,<br />

a unit of Google-parent Alphabet, and<br />

General Motors-owned Cruise essentially<br />

run 24-hour robotaxi services in San<br />

Francisco.<br />

Waymo cars were cleared to travel at<br />

speeds as fast as 65 miles per hour (105<br />

kilometers per hour) without human<br />

drivers at the wheel, even in some<br />

inclement weather.<br />

It also won permission to offer driverless<br />

car rides to paying passengers in its home<br />

city of Mountain View, in Silicon Valley.<br />

Cruise was approved to run fared<br />

passenger service in San Francisco at no<br />

faster than 35 miles per hour and not<br />

through dense fog or heavy smoke.<br />

Previously, Cruise could charge customers<br />

only during certain hours of the day.<br />

Waymo had not been allowed to charge for<br />

rides without a human driver on board.<br />

Driverless cars were first introduced in San<br />

Francisco in 2014 with a mandatory human<br />

“safety driver” on board.<br />

Four years later, California scrapped its<br />

requirement for a human driver to be in<br />

the car.<br />

The CPUC session drew commenters from<br />

all sides of the issue, with some calling<br />

robotaxis unsafe menaces while others<br />

lauded them as solutions to everything<br />

from climate change to road rage.<br />

Driverless cars have gotten stuck in the<br />

middle of roads, blocked bus lanes or<br />

even interfered in police or firefighter<br />

operations.<br />

But others at the hearing praised the<br />

vehicles for giving independence to people<br />

with disabilities, making roads safer and<br />

helping eliminate discrimination.<br />

Others opposed cars of any kind, saying<br />

the future lies in clean, convenient and<br />

affordable public transit.<br />

<strong>September</strong> <strong>2023</strong> 70

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