According to the consolidated data of the machinery manufacturing industry shared by the Machinery Exporters Association (MAIB), Turkey’s total machinery exports, including free zones, in the 8 months of the year was 18.6 billion dollars. Stating that the Medium Term Program is an important guide that will affect machinery and equipment investments in the future, Kutlu Karavelioğlu, President of the Machinery Exporters Association, said: “Depending on the developments in the world, the need for new measures for our exporters in line with our country’s export-oriented growth target comes to the fore. “There are on-site findings in the MTP that point to these needs, and the emphasis on price stability in the plan is of vital importance for us,” he said.
According to the consolidated data of the machinery manufacturing industry, at the end of the 8th month of the year, Turkey’s total machinery exports, including free zones, increased by 11.1 percent compared to the same period of the previous year, reaching 18.6 billion dollars. In this period, when exports to the five European countries that export the most machinery, Germany, Italy, the United Kingdom, France and Spain, decreased by 2.5 to 12.4 percent on a quantity basis, revenues increased by 1.6 to 11.6 percent due to the increase in machinery prices. . In the sector, where the average export unit prices per KG are 7.2 dollars, unit prices in machinery exports to the USA and Russia are above 10 dollars. According to TÜİK end-July data, machinery exports increased by 17.3 percent to 27.9 billion dollars in the last 12 months, machinery imports increased by 24.3 percent to 43.9 billion dollars, and the foreign trade deficit increased to 16 billion dollars.
“There are on-site determinations regarding the needs of exporters in the MTP”
Kutlu Karavelioğlu, President of the Machinery Exporters Association, stated that in this period when the fight against global inflation has not yet yielded the desired results, the pressure of tightening trends on growth rates continues, stating that the next 8-9 months will be a period in which businesses must be resistant to new developments and said:
“The possibility of continuing interest rate increases in Europe, where we export 61.2 percent of our machinery, means that weak growth will continue until the end of the year. This process may be experienced as a period of contraction in Germany, where we have the highest production and market integration, due to restrictions on trade with its two largest markets, Russia and China. However, we should not overlook that during all difficult times in Germany, machinery manufacturers in Turkey felt the need to benefit more from their production and competitiveness, and that all difficult processes presented extraordinary opportunities for the development of new collaborations. As we leave behind a quarter in which the world’s lowest growth figures of recent years occurred and a year in which global trade contracted rapidly, we can say that the 11.1 percent increase in our machinery exports has made our competitors jealous. Our production increased by 9.7 percent in the first half, when the machinery production of developed countries contracted. “In this environment where access to finance has become difficult all over the world and investment costs have diminished the appetite of businesses, we will look for new ways to increase our exports.”
Karavelioğlu stated that the increase in machinery and equipment investments in Turkey at 6.3 and 7.4 percent in the first two quarters is positive in terms of growth data; “Depending on the developments in the world, the need for new measures for our exporters in line with our country’s export-oriented growth target comes to the fore. There are on-site findings in the MTP that point to these needs, and the emphasis on price stability in the plan is of vital importance to us. “Managers of foreign companies that source their supplies from Turkey point out the unpredictability in the exchange rate-inflation balance in all our interviews with them,” he said.
“It would be appropriate to sign an FTA with China”
Evaluating the possible effects of the change in Turkey’s economic policies in the second half of the year, when the global slowdown will continue, Karavelioğlu said:
“Many countries of which we are customers were happy when imports became cheaper in the first quarter due to the decrease in foreign exchange and increased the demand for imported goods. Because while there was a contraction in demand in the world, the existence of such a vibrant market whetted everyone’s appetite.
China, which experienced a decrease in demand in the domestic market and tried to implement an aggressive export policy by devaluing its currency, was one of the countries that made the best use of this process. It sold 7 billion dollars worth of machinery to Turkey in the first 7 months of the year, when many countries tried to protect their domestic market and domestic manufacturers with strict measures. Under these conditions, we would be very happy if we could find a market where we could move freely in machinery exports and achieve an increase of over 30 percent. “Considering the 35 percent taxes we face on exports, we think it would be appropriate to sign a free trade agreement with China.”
Pointing out that the correction in the TL at the beginning of the summer was appropriate in terms of combating the current account deficit, Karavelioğlu said that the current exchange rates put a lot of pressure on other sectors, especially those with relatively low added value. He underlined the following:
“Conditions in the domestic and foreign markets have not caused a slowdown in our machinery and equipment industry production so far, but the tightening trends that took effect last month have deeply affected the financing conditions of the sectors in which we do business. We find the headlines in the MTP aimed at reducing the negative effects of the inflationary environment convincing. “We expect these steps aimed at price stability to be implemented as soon as possible.”
“The machinery sector must be at the center in green and digital transformation”
Karavelioğlu concluded his words by stating that when they analyzed the structural areas highlighted in the MTP with an export focus, they saw that the selected areas, especially Green and Digital Transformation, overlapped with the main agenda of the industrialists:
“The titles expressing the improvement of the technological composition of exports were prepared by taking into consideration the reform areas in terms of both growth and commercial legislation. Sectoral roadmaps for businesses such as resource, process and energy efficiency and digitalization have also been prepared taking into account the European Green Deal. This text, which forms the sustainability infrastructure, is a legislation to which we, as the machinery industry, which has been involved in federations and peak organizations in Europe for years, have contributed. Green and digital transformation titles can only be; It should be kept in mind that it can be designed by focusing on the machinery sector, which initiates and triggers the industrial process and subsequently acts as a key in the formation of a huge economy. In essence, if the industry needs to be reshaped, transformed and changed, which is necessary, our duty is to be a pioneer in these studies in our country.”
