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Turkiye: Machinery exports increased to $12.5 billion

Turkiye’s machinery exports increased by 7.9% in the first 6 months of the year compared to the same period of the previous year and reached $12.5 billion.

According to the data of the Machinery Exporters’ Association (MAIB), the increase in Turkiye’s machinery exports continued in the first half of the year. The January-June period exports of the machinery manufacturing industry reached $12.5 billion when the free zones of Turkiye are included. The increase in the exports of the sector was 7.9% compared to the same period of the previous year.

Last month, the most exports were made to Germany and the USA. Machinery exports to Russia, which ranks third, increased by more than 50% and exceeded $100 million.

In his statement regarding the export figures and developments in the sector, Kutlu Karavelioglu, Chairman of the Machinery Exporters Union, stated that the slowdown in the euro area has not yet been reflected in machinery and equipment investments as expected, and stated that the businesses in this region have started to become more fragile with the effects of the epidemic and the Russia-Ukraine war.

Explaining that there was a decrease in machinery exports in Germany and Italy in June, and that these countries are the EU countries that have the most problems in energy supply and security, Karavelioglu said, “Germany, which has a foreign trade deficit on a monthly basis for the first time in many years, is heavily affected by the sanctions against Russia. In our case, on the contrary, machinery exports to Russia are running from record to record.”

“We can close the year close to the $27 billion target”

Kutlu Karavelioglu noted that with the tightening policy of the EU followed by the USA, machinery and equipment investments in the west may slow down significantly and said that the possibility of a recession in their main market made them think.

Karavelioglu said, “On the other hand, we still maintain our hope that the production will become visible with the change in geography and that the increasing interest with our strong and reliable stance in the epidemic process will peak with sustainability investments. If our export growth rate can hold above 10%, we will be able to close the year close to our target of $27 billion this year.”

“After the troubles in Germany, Turkiye’s orders will increase”

Machinery Exporters’ Association President Karavelioglu stated that the problems experienced in Germany and the West will be reflected in Turkiye as an order with the effect of the shift in the supply chains, and continued his words as follows:

“The revision of production lines with qualified machines has to continue. Our machinery and information sectors have to work much more closely, our enterprises have to constantly expand their digital and green product export product groups. Another meaning of this is that our need for energy efficiency and resource diversity in our country will increase rapidly. “

Karavelioglu said that the machinery sector, whose production has increased by 9% and 32% in the last two years in a row, is now much more competitive, but needs more working capital.

Karavelioglu stated that they had to do more domestic work during periods when foreign markets slowed down. “Since we follow an export-oriented growth policy, although it is difficult to replicate the extraordinary increases of 21% and 24% in Turkiye’s machinery and equipment investments in the last two years in a row, we must also find ways to maintain production investments despite anti-inflationary measures.”

“It is more important than how many dollars 1 euro is than how many TL it is”

Kutlu Karavelioglu touched upon the equalization of the dollar/euro parity and said that 70% of the sector’s exports are made in euros and 70% of its imports are in dollars.

Noting that “earning euros and spending dollars” is an unfavorable situation as the parity weakens, Karvelioglu made the following statements:

“If this situation continues, all our sectors will have to revise their annual export targets in dollar terms. Turkiye is one of the countries with the highest domestic added value in machinery exports. Our domestic added value rate is 76%, at the same level as Germany. In other words, we need TL more than dollars. For this reason, it is important for our sector how many TL 1 euro is, rather than how many dollars it is. We need stable export growth and we believe that the natural level of exchange rates against TL can be a balancing factor in this period when the parity is almost equal and recession concerns are at its peak.”

“A common strategy should be established against imports from the Far East”

Machinery Exporters’ Association President Karavelioglu stated that the money they paid to foreign machines in the last 12 months has reached $35 billion , and that Turkiye has paid $150 million more to the machines coming from the Far East countries every month this year.

Emphasizing that if it continues at this rate, the amount to be paid to the Far East countries at the end of the year will exceed $10 billion, Karavelioglu said, “We believe that the public, machine users and machine manufacturers have to devise a common strategy on this issue, which we find risky in terms of foreign exchange balance, sustainability and lifetime costs.”

Source: Trthaber / Translated by Irem Yildiz

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