According to the consolidated data of the machinery manufacturing industry shared by the Machinery Exporters’ Association (MAİB), Turkey’s total machinery exports, including free zones, in the first 8 months of the year were 18.3 billion dollars. Drawing attention to the fact that domestic machinery and equipment investments have declined for the first time since the third quarter of 2019, Machinery Exporters’ Association President Kutlu Karavelioğlu said, “According to the Medium-Term Plan, an increase in these investments is not expected in 2025. In this process, which foresees the continuation of tightening and domestic contraction, the growth target determined at a relatively high level of 4 percent means that net exports will contribute more to growth. The fact that exporters are relied upon so much in growth creates an expectation that the pressure created by the valuable TL will be eliminated with different supports for exports.”
According to the consolidated data of the machinery manufacturing industry, at the end of the first 8 months of the year, Turkey’s total machinery exports, including free zones, were 18.3 billion dollars, while its machinery exports for the last 12 months were 28.2 billion dollars. The average export unit price per KG of the sector, which achieved a result close to the last 12-month average with a monthly export of 2.4 billion dollars in August, was calculated as 7.5 dollars. The sector, which exported approximately 200 million dollars worth of machinery to the US in August, increased its 8-month exports to this country by 12.2 percent to 1.4 billion dollars. Despite the stagnation in its economy, Germany maintained its first place in Turkey’s machinery exports with 2.3 billion dollars during this period, while Russia ranked second with 1.4 billion dollars despite the high contraction of 17.9 percent.
Kutlu Karavelioğlu, Chairman of the Machinery Exporters’ Association, stated that the data obtained in exports to the USA, which entered the last quarter with the hope of liveliness with the start of interest rate cuts, was a savior for the sector this year and said:
“The USA, where negative expectations have increased in some segments due to the contraction in employment, is not having a stagnant year for us at all. Although it is not at a level that will compensate for our known losses in Russia, Germany and Israel, the increase we achieved in the USA has been a source of morale for the sector this year.
Although the negative developments in global machinery investments and trade have different effects on our export markets and sub-sectors, we have had the opportunity to maintain our record export level of 28.2 billion dollars that we reached in 2023 in the last 12 months. We will just start to see the negative effects of our competitiveness, which has weakened due to the decrease in orders and deteriorating scales, especially starting from the second quarter, on our exports. The start of the interest rate reduction cycle on two continents opens the door to a new period for us. If the lack of appetite in global investments reverses as desired after this point, the only uncertainty remains our own internal problems.”
“The disinflation process is even more painful for industrialists than the Covid-19 period”
Karavelioğlu stated that the disinflation process is even more painful for industrialists than the Covid-19 period due to the side effects it creates, and stated that machinery and equipment investments have fallen behind 2020, when the longest closures were experienced due to the pandemic, and said the following:
“A decline was seen for the first time in machinery and equipment investments since the third quarter of 2019. The 5.6 percent decrease in this data, which has been going up continuously for exactly 18 quarters, is an important indicator of the difficult process in the domestic market and especially the fate awaiting our machinery manufacturers. According to the Medium Term Plan, no increase is expected in these investments in 2025. In this process, which foresees the continuation of the tightening and the contraction in the country, the growth target determined at a relatively high level of 4 percent means that net exports will contribute more to growth. However, we cannot yet predict how exporters, whose power to finance their increasing costs in foreign exchange has become very limited and a significant part of their capacity has been wasted, will provide this contribution. The fact that exporters are relied on so much in growth creates an expectation that the pressure created by the valuable TL will be eliminated with different supports for exports.”
“Import dependency also reduces control over prices”
Karavelioğlu, who stated that the EU rolling up its sleeves against the difficulty in competing with China and the USA, which is frequently emphasized in the reports of various NGOs in Europe, said the following:
“The report prepared by former ECB President Mario Draghi for the European Commission is a groundbreaking text titled Competitiveness Strategy. The measures that Europe is proposed to take to support innovation-focused growth should also be guiding for us. One of the most striking elements in the text is the emphasis on reducing dependency on critical imports. In particular, the call to reduce imports of critical raw materials from China and other geopolitical rivals, such as digital technology and energy, to external sources… Contrary to the assumption that imported input is important in combating inflation in a low exchange rate regime, we see that this creates a dependency relationship and reduces control over prices. It is already very clear that the 2.7 percent increase in our machinery imports in the last 12 months, reaching 45.1 billion dollars, does not contribute to our competitiveness.”
“We will find ways to turn Germany’s panic to our advantage”
Karavelioğlu, who said that they continue their initiatives that will increase their commercial collaborations while trying to overcome this process where profit margins are extremely narrow without experiencing market loss, stated the following:
“While artificial intelligence, robotics and 3D technologies are increasing and becoming widespread, the transformation in the fields of digitalization and sustainability is becoming decisive. Those who want to sell goods to the EU, which has accelerated the regulations originating from the Green Deal text, are racing against time in terms of compliance with the regulations. Germany, where machinery exports decreased by 4.8 percent in nominal terms in the first half of the year compared to the previous year, wants to compensate for the loss it has experienced especially in EU countries as quickly as possible. If we can accelerate in Twin Transformation, we can support Germany in this panic as we have always done and permanently increase our share in its imports. To this end, we will host important events that will develop our technical and commercial collaborations with Germany in the last quarter with the brand of Türkiye’nin Makinecileri. Our machinery manufacturing sector is considered by German institutions and sectoral organizations to be the Turkish sector that is most integrated with their own industry. Even our Exporters’ Association alone has protocols with 9 different German organizations, including federations, technology institutes and academies, and investment agencies, which were put into effect years ago.
As one of these; we will be holding two events in Berlin and Istanbul with the German Purchasing Association (BME), which has a purchasing volume of 1.3 trillion Euros and a membership of nearly 10 thousand. Our main agenda item in these events will be concrete business development. I would like to invite companies from the machinery, electrical-electronics and automotive sectors, which form the technology ecosystem of our country, to the B2B meetings to be held within the scope of the 1st Procurement and Purchasing Forum Turkey event, which we will organize together with BME in Istanbul on December 4th. Our website regarding matching and registrations has been opened for access.”
