According to consolidated data announced by the Machinery Exporters Association (MAİB), Turkey’s total machinery exports, including free zones, at the end of 2023 was 28.1 billion dollars. Pointing out that they closed a year in which world machinery exports shrank by 1 percent with an increase, Kutlu Karavelioğlu, President of the Machinery Exporters Association, stated that they set their new year target as 30 billion dollars and said, “Since we started the integration with the European Green Deal early, we are in a very advantageous position compared to our competitors in the East in this regard. “We should expect that this advantage, which is becoming more evident day by day, will have significant benefits in attracting investment to our sector,” he said.
According to the consolidated data of the machinery manufacturing industry announced by the Machinery Exporters Association, the sector increased its exports, including free zones, by 11 percent compared to the previous year, reaching 28.1 billion dollars at the end of 2023. While exports to Germany, whose machinery imports remained flat throughout the year, increased by 7.6 percent and reached 3.5 billion dollars, the income from Russia, the second country with the highest exports, increased by 68.3 percent and approached 3 billion dollars. Increases of up to 10 percent were achieved in the USA, Italy and the United Kingdom, where machinery exports exceeded 1 billion dollars. The three most exported product groups were domestic and industrial refrigeration machines, internal combustion engines and their parts, and construction and mining machines, while machine tools exports increased by 15.3 percent and reached the threshold of 1.5 billion dollars. The industry’s average export price per KG also increased from 6.2 dollars to 7.2 dollars.
“The emphasis on added value coming from the most authoritative voices is courageous transmitter”
Pointing out that the decline in global machinery orders was evident in the last industrial PMI indicator of 2023, which passed under the shadow of the monetary tightening policies of central banks around the world, Kutlu Karavelioğlu, President of the Machinery Exporters Association, pointed out that the machinery manufacturers in Turkey differentiated positively from competing countries throughout the year and said:
“In the first three quarters of 2023, when machinery and equipment industrial production in the world shrank by nearly 1 percent and machinery and equipment investments by 2.5 percent, the same data in Turkey showed an increase of 9.4 percent and 11.5 percent, respectively. Turkey’s machinery manufacturers closed the year, in which it was estimated that world goods exports decreased by 5 percent and machinery exports by 1 percent, by bringing their share in global exports closer to 1.2 percent. Although we cannot yet predict the effects of next year’s effects on Europe, our main market, having put the brakes on in the last quarter or the tightening of sanctions on Russia, our second largest market, we believe that our steady rise will continue. In our plans for the new year, for which we have set an export target of 30 billion dollars, we are encouraged by the statements of the most authoritative voices, especially our President, our Ministers of Commerce, Industry and Technology, who make visible the capabilities and success of our machinery and other sectors with high added value. “This emphasis on the success of the machinery industry reveals with numbers how skilled we are in developing technology, and refutes the propaganda that we are an import-dependent country.”
“The consequences of the EU’s decline in global trade will be significant”
Karavelioğlu touched upon the effects of the uncertainties in the European Union, Turkey’s largest export market, on the foreign trade performance of the sector and said, “As much as high interest rates in Europe, a fundamental determinant of the industrial agenda recently is the integration problems that emerged with the Green Deal process. Despite the EU’s high attractiveness on issues such as size and purchasing power, many economic regions are increasingly hesitant to sign a free trade agreement with the EU. The social and environmental principles imposed by the Constitutional Court, which was initially built on protecting and improving the global competitiveness of European businesses, pushes its own business world into difficulties and paves the way for manufacturers in the USA and China, where norms are looser. “The possibility of the European Union losing ground in global trade should also make Turkey, which does most of its trade with this region, think,” he said.
“Success in Constitutional Court compliance is also attractive for foreign investors creates
Pointing out that innovative developments in the machinery industry are at the center of Twin Transformation and that the future will be much clearer for countries and businesses that adapt when the regulation processes in Europe are completed, Karavelioğlu said:
“European industry faces countless regulations regarding green trade and digitalisation. Since the machinery sector by its nature consists of small and medium-sized enterprises, machinery manufacturers in Europe have difficulty in fulfilling their huge responsibilities. It is only a matter of time before manufacturers, who do not even know how to bear the responsibility of their suppliers, will be held responsible for their customers. Countries with less competitive power, especially Far Asia and Eastern Europe, also experience great risks in trade with Europe. Since we started integration early in public-private cooperation, we are in a much more advantageous position than our competitors in the East in this regard. We should also expect that this advantage, which is becoming more evident day by day, will have significant benefits in attracting investment to our sector. The way to maintain this is to make innovation and R&D studies sustainable, that is, to diversify and expand the supports for the machinery sector in line with the SME structure of the sector. Another important issue is to make the operating environment safe for all local and foreign investors by removing unregistered and unfair competition elements.”
“Machinery is flowing from China and India”
Underlining that according to TradeMap data, among the 30 countries that purchased the most machinery from abroad as of the third quarter, Turkey was the one whose imports increased the most with 23 percent, Karavelioğlu concluded his words as follows: “Turkey 2023, compared to 2019 before the pandemic, increased its machinery and equipment investment by 70 percent, It closed by becoming a country that increased its machinery production in terms of tonnage by 66 percent and its machinery export revenue by 43 percent. While this performance data, which is nearly 5 times the world average, makes us the shining star of the global industry, our machinery imports have increased by 85 percent, reaching 45 billion dollars. We now have a deficit of 17 billion dollars in machinery, which is the second-ranked commodity group in both imports and exports. Although we carefully follow and support the updates made in the import regime, we insist on our demands to close the back doors created by the Incentive Legislation and reduce the Additional Customs Duties to the corresponding levels.
The fact that we imported 12 billion dollars worth of machinery with a 22 percent increase from China, whose machinery exports decreased by nearly 10 percent in 2023, and that we purchased 1.2 billion dollars worth of machinery with a 26 percent increase from India, which appears in the global market with similarly extremely aggressive methods, is only our sector. It brings future risks not only for Turkey but also for the Turkish industry. The fact that the total amount of machines we were able to sell to these two countries did not even reach 400 million dollars, that is, we have been continuing this one-way trade for years, clearly reveals what a grievous injustice we are facing. “Although all the measures introduced in the 12th Development Plan to support our sector are very important, we see it as essential for Turkey to achieve a much stronger R&D and technology ecosystem for those that will prevent the supply of unqualified goods to the market to be implemented as soon as possible.”
