Automotiv Export October 2019 by istmag

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Monthly automotive aftermarket magazine October 2019

Monthly automotive aftermarket magazine

GROUP CHAIRMAN H. FERRUH ISIK PUBLISHER: İstmag Magazin Gazetecilik İç ve Dış Ticaret Ltd. Şti. Managing Editor (Responsible) Mehmet Söztutan mehmet.soztutan@img.com.tr

Mehmet Soztutan, Editor-in-Chief mehmet.soztutan@img.com.tr

Editor Ayça Sarıoğlu ayca.sarioglu@img.com.tr Advertising Manager Adem Saçın adem.sacin@img.com.tr Foreign Relations Manager Yusuf Okcu yusuf.okcu@img.com.tr Correspondent İsmail Çakır ismail.cakir@img.com.tr

WE ARE AT EQUIP AUTO PARIS 2019 As known, the Turkish auto parts industry has recorded a dynamic growth in line with the automotive industry. From simple components in the mid-1960s, the sector has ascended to produce high-tech components. The exports by Turkish automotive sector have reached remarkable figures in the last decade. The automotive industry has been active since the early seventies. Since the full integration to the European Customs Union in 1994, Turkey has become a major production platform for global automotive manufacturers. The industry with its large capacity, wide variety of production and high standards, supports automotive industry production and the vehicles in Turkey and also has ample potential for additional exports. The leading foreign automotive parts manufacturers have established their presence in the country through joint-ventures. There has also been substantial locally-owned investments by spare parts manufacturers. The major effects are that: - Quality of production improved dramatically, especially through the establishment of quality management systems. - The industry has adapted to the EU regulations and has established an efficient and exemplary cooperation with public institutions in the transformation of the EU regulations to national regulations. - Exports have risen sharply, and Turkish production has been integrated into manufacturers’ global planning. -The export potential of the automotive parts sector, coupled with the presence of major international automotive manufacturers, has attracted an increasing number of foreign investors. Key factors which attract foreign capital inflows to Turkey mainly include the market size, consumer composition, friendly investment legislation and banking system together with other attractiveness arising from highly skilled human resources in production and management, the unsaturated domestic market with high potential, easy access to neighboring (regional) emerging markets, and low labor cost. Indeed, the industry exhibit its full potential in major specialized fairs both at home and abroad. Our publications remain at the service of those businesses people seeking to increase their share in the increasingly competitive foreign markets. This month, we participate in EQUIP AUTO PARIS 2019 which signifies everything dedicated to equipment, spare parts and accessories for vehicles. We are convinced that the event would turn out to be an ideal ground for the business people operating in the automotive business. We wish them lucrative trade.

Technical Manager Tayfun Aydın tayfun.aydin@img.com.tr Design & Graphics Sami aktaş sami.aktas@img.com.tr Finance Manager Cuma Karaman cuma.karaman@img.com.tr Accountant Yusuf Demirkazık yusuf.demirkazik@img.com.tr Subsciption İsmail Özçelik ismail.ozcelik@img.com.tr HEAD OFFICE: Evren Mahallesi Bahar Caddesi Polat İş Merkezi B Blok No:1 Kat: 4 Güneşli - Bağcılar/ İstanbul Tel: (90.212) 604 51 00 Fax: (90.212) 604 51 35 www.img.com.tr turkey@ihlas.net.tr KONYA: Metin Demir Hazım Uluşahin İş Merkezi C Blok Kat: 6 No: 603-604-605 KONYA Tel: (90.332)238 10 71 Fax: (90.332)238 01 74 PRINTED BY: İHLAS GAZETECİLİK A.Ş. Merkez Mahallesi 29 Ekim Caddesi İhlas Plaza No:11 A/41 Yenibosna–Bahçelievler/ İSTANBUL Tel: 0212 454 30 00 www.ihlasmatbaacilik.com

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Cezeri, Turkey’s first flying car debuts at Teknofest

urkey’s first flying car, Cezeri became the most notable product at this year’s Teknofest, the country’s top aerospace and technology festival visited by nearly 2 million people from Sept. 17-22. Baykar’s Technical Manager and Turkey Technology Team Foundation (T3 Foundation) Chairman Selçuk Bayraktar developed the flying car. Cezeri stood caught the imagination of the visitors throughout the event. Project manager at Cezeri Robot, Ozan Yağcı became a prominent name at this year’s Teknofest, thanks to their product. “Members of the International Vertical Flight Society are now curious about our prototype. They want to know what kind of vehicle it is,” Yağcı shared his enthusiasm while introducing Turkey’s first national flying vehicle to

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the visitors throughout the four-day festival. Cezeri Robot, named after the 12thcentury Muslim inventor Ismail alJazari (Cezeri in Turkish), has been involved in hundreds of projects, including the giant air-land transport brands such as Boeing, Bell, RollsRoyce, the leading names of ridesharing such as Uber, and cargo companies like Amazon due to its unmanned aerial vehicle-based technology. While the competitive race continues in the international arena, the flying car market is estimated to be worth $90 billion by 2026, according to Report Consultant. Finally, on Sept. 14, Germany’s Volocopter brand completed its project and successfully performed the flight test. So, what is Turkey’s position in this race?

Battery tech matters Yağcı said Turkey was very close to flight tests and that they would concentrate on the testing process after Teknofest. “We are not following the trend but determining the trend. We have gathered serious experience in aviation for a while now. Our Bayraktar TB2 UAV flew around 150,000 hours. We have very advanced technologies in terms of both software and hardware,” Yağcı said. “In aviation, there is a rule: to say that an aircraft is reliable, it must have flown 30,000 hours. Many international brands have made hour-based flights. We have achieved thousands of hours; therefore, we use proven flight algorithms. We own the critical components, the entire flight control system, the sensor and the structural system of this vehicle.

When reminded of the projects in the U.S. and Europe, most of which were electric, some worked with hybrid and even hydrogen fuel, Yağcı noted that if you want to transport people, the vehicle must be hybrid or electric. “Hybrid stays in the air longer, but there is carbon release. After all, everyone has to go back to electricity, but the truth is that a serious leap is a must in battery technology,” he further explained. Yağcı pointed out that the regulations regarding civil public transport are a priority, as well as the battery technology, which is the determinant of the load-carrying capacity. “Before dozens of these vehicles fly in the air, everything needs to be defined regularly because there are too many details to consider,” he continued. “This is a very difficult job. There is no international standard because everyone is new at this. It will take time to close the gaps in the aviation sector. Both the U.S. and Europe have just begun working on this issue. As we begin our flight tests, we will also work on these civil aviation rules.” LIDAR sensor technology Yağcı said they wanted to integrate superior aviation systems to aircraft in the next stage, indicating that they would use LIDAR sensor technology, which could be defined as the operation of the radar with laser systems, allowing the visualization of what is happening around the aircraft in three dimensions. This technology allows the aircraft to detect and avoid obstacles, just like autonomous vehicles. US Air Force ready for AI The tension between the Gulf countries in the center of the Persian Gulf, including the U.S. and sometimes Britain, is proof that the importance of the concept of national security will grow further. While Gulf countries blamed each other for some of the commercial ships seized in the Persian Gulf, there were mutual threats as well. Following this new international “hot spot” that emerged between July and August, the recent announcement that Saudi Arabia’s official oil company, Saudi Aramco, was attacked by an armed unmanned aerial vehicle (UAV) reveals that the technological equipment of air forces will largely determine the military superiority of countries. While these developments took place in the Gulf, the U.S. Air Force

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published a very important report on the critical role of air forces. Further cooperation in trade The priority point outlined in the U.S. Air Force report is that artificial intelligence (AI) will change the concept of war from the 21st century onward. Other headlines highlighted in this report are that this superior technology has been used by commercial airlines so far and that the U.S. air, space and cyberspace missions are filtering through AI in the fields of data and information, while rival countries continue to integrate artificial intelligence into their weapons. For this reason, the report further stresses the need for the U.S. air force capability to be faster and smarter, adding this technology will bring higher speed and more accuracy in every mission. Signed by David L. Goldfein, the chief of staff of the U.S. Air Force, the report mentions four areas that the U.S. Department of Defense will concentrate on for AI defense strategy. The first of these are the signs that the air force will cooperate more with private companies. The report says the federal government will collaborate with top-notch technology vendors, both internally and externally, and produce models that are commercially accepted and built concerning the supply chain security. The second point is that data means everything for AI and that AI algorithms should be trained constantly with the data. The report also points

to the almost simultaneous data flow to the algorithms for the success of this technology in operations, as well as the need to use it instantly in operation and to ensure the continuous development of the algorithm. Democratic process The third and most crucial point is to make algorithms that provide AI solutions publicly available while achieving these solutions. While emphasizing that the technologies that are supported by the private sector in accordance with U.S. laws will be open to the public and that these technologies can be used by competing countries, the responsibility of using this technology and the purpose of developing this technology will be a strategic necessity, thus the urgency of a fast purchase and sales process. The fourth article in the report, on the other hand, answers another serious question. Will robots replace soldiers? The U.S. Air Force believes personnel will be able to learn the skills needed to use this technology and that the adaptation of the new technologies for personnel use will constitute the biggest challenge within the command. However, the machines will not replace people, the report specifically states. If used correctly, this technology will enrich the workforce, solve complex equations and allow decision-makers to make decisions on proven data. Thus, it is stated that military personnel will be able to concentrate on more complex tasks such as critical thinking.

Locally produced vehicles hit roads in 170 countries

otor vehicles produced in factories in Turkey have been exported to 170 countries around the globe in the January-June period, official figures showed. The value of these motor vehicles

totaled around $13 billion, with European countries being the top market for Turkish exporters in this period, according to Turkish Statistical Institute (TurkStat) data. While the vehicles manufactured in

Turkey by major brands of the sector, such as Fiat, Renault, Ford, Toyota and Hyundai, hit the European streets, imports of motor vehicles fell by 48% year-on-year in the aforementioned period. Exports on the other hand, posted a 5% drop. Exports were spearheaded by European automotive giants such as Germany and France. While France took the lead in exports with $1.6 billion, Germany came second with $1.5 billion, followed by Italy with $1.3 billion, the United Kingdom with $1.2 billion and Spain with $804 million. Turkey’s imports in this sector dropped to $4.3 billion. Thus, $8.3 billion generated in motor vehicle imports in the first half of last year decreased by $4 billion. Germany led the way in Turkey’s motor vehicle imports in the first half of the year with $1 billion, followed by France with $371 million, Spain with $332 million, Japan with $296 million and Italy with $264 million.

Turkey-A global player in the automotive industry

uring the 1990’s, as other international manufacturers like Toyota, Honda, Hyundai, Isuzu and Mercedes-Benz entered the market, Turkey rapidly became an automotive production base which not only caters to one-time developments of the industry but rather holds longterm development options. Turkey has a thriving automotive sector, demonstrating substantial growth in the past. All players involved, including local authorities and the government, are participating in providing conditions to increase output in the future. Some of the facts are: -High level of integration into the global automotive industry -14th major automotive producer in theWorld,with 78% average export rate -Vehicles of Turkish origin hold the leading position among the vehicles coming from outside of EU -Production, export, and

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engineering hub of global brands for international markets -Quality products with high export rates -Hundreds of Tier 1 companies working directly with OEMs -Center of excellence in automotive engineering and R&D,in which new technologies are developed Strong international presence -Giants of global automotive value chain benefit from Turkey’s location, cost, andcompetitiveadvantages -Because of their profitable business in the country, companies in Turkey

continue to invest in the country’s future -9 R&D centers support not only the local operations, but also the operations in other plants of parent companies. -Ford Otosan’s R&D department is one of Ford’s 3 largest global R&D centers -R&D centerin Bursa is the only center of Fiat outside of Italy serving the European market. -For Courier, Ford’s new light commercial vehicle, the Yeniköy plant is the sole production center in the world. Toyota’s C-HR Hybrid is produced in Turkey for World markets Daimler R&D is the center of competence for some parts and carries global responsibility. -With more than 40 thousand employees, automotive OEMs are one of the major employers in the manufacturing industry.

Turkey’s defense, aerospace exports see

37.7% rise in 9 months

urkey’s defense and aerospace exports recorded a surge of 37.7% in the period of January to September compared to the same period last year and hit $1.9 billion – the highest level in the country’s history. Defense exports totaled $1.3 billion in the same period last year. The data of the Turkish Exporters’ Assembly (TİM) revealed that defense and aerospace industry has recorded the highest rise in exports among other

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sectors in the first three quarters of the year. Overall Turkish exports rose by 2.6% in this period. The significant rise in the defense exports were followed by the cement, glass and ceramics exports with 18.9% and the abroad sales of chemicals with 17.6%. The in hazelnut exports increased by 11.3%. In the first nine months of the year, defense and aerospace exports to the U.S. rose by 17.1% and totaled $595.2 million. Germany came second with a

total defense exports of $184.7 million and defense sales to Europe’s largest economy rose by 9.7%. The sector’s exports to Oman recorded a rise of 35.8% and reached $184.7 million. Another drastic rise was seen in the defense sales to Qatar with 336.6%, while exports to the country totaled $138.7 million. The highest surge, however, was recorded in the exports to the United Arab Emirates (UAE). The defense sales to the country hit $96.4 million, rising by 763.8%. Home to a number of leading Turkish defense giants, Ankara recorded the highest defense exports in the January-September period. The defense exports from the Turkish capital accounted for 44.4% of the total overseas sales of the sector with $825.3 million and increased by 26.6%. The defense exports of Istanbul and Eskişehir reached $490.9 million and 341.2 million, respectively. Traditionally described as Turkey’s hottest resort destination, Antalya ranked fourth in Turkey’s defense exports in the first nine months of the year with $43.3 million.

The Automotive Manufacturers Association excels in its mission and vision

he Automotive Manufacturers Association (OSD), established in 1974, represents the automotive manufacturers operating in Turkey at domestic and international levels. With its 14 members, all being a global player, and specialized team, OSD has been maintaining its mission of

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developing Automotive Industry in Turkey for 45 years. OSD is a member of the International Automotive Manufacturers Association (OICA) since January 1995 and is a Liason member of the European Automotive Manufacturers Association (ACEA) since March 2006. Vision : To make the Turkish Automotive

Industry an essential member of the continuously evolving global automotive ecosystem. Mission : Produce, implement, and inform related parties of policies that contribute to the local and global competitiveness of all of the members of the Turkish Automotive Industry.

European car industry warns of ‘catastrophic’ no-deal Brexit

urope’s leading automotive trade groups joined forces to warn about the “catastrophic” consequences of a no-deal Brexit. Europe-wide industry groups and 21 national auto associations, including Britain’s Society of Motor Manufacturers and Traders, said new tariffs on cars and vans could cost the EU/U.K. industry 5.7 billion euros ($6.3 billion) if Britain departs the European Union without an agreement. Consumers would face higher prices if manufacturers cannot absorb the additional costs. The U.K. is due to leave the EU on Oct. 31, and British Prime Minister Boris Johnson has said it will do so come what may. If the country withdraws without a deal on issues such as citizens’ rights, its divorce bill from the EU and the border between Ireland and Northern Ireland, tariffs governed by the World Trade Organization would have to be imposed. In the case of cars, the tariff is 10%. “Brexit is not just a British problem. We are all concerned in the European automotive industry, and even further,”

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Christian Peugeot, the president of the Committee of French Automobile Manufacturers, said. “Be it as exporters to the U.K. market or producers locally, which we are both, we will inevitably be negatively affected,” he said. The auto industry, including associated suppliers, is a European success story, producing a little more than 19 million vehicles a year and employing nearly 14 million people. While Britain is a big importer of European cars, the country has seen its car industry go from strength to strength over the past couple of decades. Manufacturers from around the world, including Japan’s Honda and Nissan, use it as a base for selling across the EU. Key to the industry’s success in the past few years has been the ability of firms to seamlessly operate and source across the EU’s single market — the so-called just-in-time operating model. If Britain withdraws without a deal, businesses won’t be able to operate in the single market in the way to which they have become accustomed.

It wouldn’t just be about tariffs; other requirements, such as the need to meet customs regulations, would delay business, raising acute questions about the viability of justin-time operations. The automotive industry groups said the cost of just one minute of production stoppage in the U.K. amounts to 54,700 euros ($60,000). Given recent headwinds, a number of firms have said they could shift production in the event of a nodeal Brexit. “A no-deal Brexit would have an immediate and devastating impact on the industry, undermining competitiveness and causing irreversible and severe damage,” said Mike Hawes, the chief executive of the British auto association, the SMMT. Even the most passionate supporters of Brexit say a no-deal departure would cause disruptions, at least in the short-term. However, they say that longer-term, the U.K.’s economy would be able to thrive as the policy framework is adjusted and a greater focus on fast-growing economies is pursued

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Turkish auto sector targets larger share of Russian market

en Turkish companies participating in ComTrans 2019 in Moscow under the auspices of the Uludağ Automotive Industry Exporters Association (OİB) held bilateral meetings to grab a larger share of Russia’s automotive imports, which have reached $23.6 billion annually. OİB, the only representative of the Turkish automotive sector in exports, continues to participate in international fairs held in Russia to achieve their export target of $500 million to the country this year. With the national participation of OİB, 10 Turkish companies from the automotive sector had the opportunity to take part in ComTrans 2019, one of the leading heavy vehicle and commercial vehicle expos in Russia, where all kinds of parts, equipment, accessories, and repair and maintenance products are being exhibited. The Turkish companies participating in ComTrans 2019 include Asas Pazarlama, BŞL Bijon Cıvata Metal, Çiftel Elektromekanik, Ege Fren, Eku

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Fren ve Döküm, Ferra Filtre, Hammer Endüstri, Kale Oto Radyatör, Özteknik Motorlu Taşıtlar ve Makine and Plus Kalıp. Turkish companies attracted great attention from the participants with their latest products, ranging from air filters to oil and fuel filters, clutch systems, steering and suspension systems, brake pads and engine cooling radiators. Russia is one of the leading markets for Turkey’s automotive exports. Russia’s automotive imports amounted to $21.5 billion in 2017 and $23.6 billion in 2018, while Turkey’s automotive exports to Russia rose 38% to $328 million in 2017 and $454 million in 2018. In 2019,

Turkey’s automotive exports to Russia are expected to exceed $500 million. The main export items of Russia were listed as passenger cars with $1.3 billion, motor vehicles for goods transport with $371 million, automotive components and parts with $561 million and special purpose motor vehicles with $421 million. In Turkey’s exports to Russia, automotive supply industry products took first place, while passenger cars, buses, minibuses, midibuses, special purpose motor vehicles, motor vehicles for goods transport and tow trucks were among the most exported product groups in the main industry.

Turkey’s sectoral confidence climbs in September

ectoral confidence in Turkey rose for services, retail trade and construction in September compared with the previous month, the country’s statistical authority reported. “The seasonally adjusted confidence index, which was 89.1 for services

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in August, increased by 0.2% in September to 89.3,” the Turkish Statistical Institute (TurkStat) said. The retail trade confidence index stood at 97.6 this month, up 2.7% from 95 in August. Seasonally adjusted construction confidence index -- 55.5 last month surged 8.3% in September

to 60.1, according to TurkStat. Sectoral confidence indices calculated from the monthly survey results are evaluated within the range of 0-200. These indices indicate an optimistic outlook when the value is above 100, a pessimistic outlook when it is below 100.

Industrial production sees 4.3% monthly rise in July

Hande Şekerci, İş Portföy Economist

urkey’s industrial production in July rose 4.3% on a monthly basis, the country’s statistical authority said.The manufacturing index saw the highest monthly rise among industrial subsectors, with 4.7%, the Turkish Statistical Institute (TurkStat) said. The mining and quarrying index also went up 3.2%, while the electricity, gas, steam and air conditioning supply

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index fell 0.5% during the same period. However, on an annual basis, the country’s industrial output decreased by 1.2% in July. Mining and quarrying was the sole sector which saw improvement in July, rising 7.8% from the same month last year. The electricity, gas, steam and air conditioning supply index posted the worst performance on a yearly basis, going down 2.4%. TurkStat data showed that the manufacturing index slipped 1.3% year-on-year in July. Industrial production has recorded a strong monthly rise in the third quarter, İş Portföy Economist Hande Şekerci said. “The preliminary indicators in August demonstrate that the weakening trend which has continued for a significant period of time is in the process of improvement,” she added. The improvement in the August figures is the sign of recovery from the sharp slowdown in June, QNB Finansbank

Deniz Çiçek, QNB Finansbank Economist

Economist Deniz Çiçek said and argued that the rise in the PMI, real economy index and manufacturing capacity utilization in August also prove that the Turkish economy will see moderate growth in the upcoming months. “The Turkish gross domestic product (GDP) is likely to register growth in the third quarter of the year,” she added.

Turkish economy showed ‘impressive resilience’ against crisis

urkey executed a “very impressive” bounce back from the challenges it faced last summer, an expert from Fitch Ratings said. “Turkey has shown a very impressive resilience, flexibility, and recovered and stabilized from the financial crisis of last summer,” Ed Parker, Fitch Ratings’ managing director for the Europe, Middle East, and Africa EMEA region, told a global conference in London. Pointing to Turkey’s strong fundamentals, Parker said the country’s sovereign balance sheet, low government debt, and private banks are in relatively good shape. He also praised the dynamism and

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flexibility of the Turkish private sector. Parker also highlighted that the country posted a current account surplus instead of a deficit as well as a decline in inflation. According to the latest Turkish Central Bank data, Turkey’s current account balance posted a $1.2 billion surplus this July, improving from a $2.2 billion deficit in July 2018. In August, consumer prices in Turkey rose 15.01% on a yearly basis, versus annual inflation of 16.65% the previous month, according to TurkStat, the Turkish Statistical Institute. “They have not had any difficulty getting the capital inflows that they need to

finance that. There was a lot of doubt this time last year,” he said. On the country’s economic outlook, Parker said there are still significant risks, and the recovery so far owes a great deal to fiscal stimulus and state banks. Parker said the underlying general government deficit this year is projected to approach 4% of GDP. “We have also seen a deterioration in banks’ asset quality, particularly stateowned banks,” he said, adding: “There is still an adverse political shock, domestic, external, U.S. sanctions that are pending, spillover from Syria or from general unrest in the Middle East.”

IMF expects positive growth in Turkish economy

he International Monetary Fund (IMF) announced that it did not expect Turkey to go into recession in 2019. The IMF predicted positive growth this year at roughly 0.25%, it said in a concluding statement of the 2019 Article IV Mission after monitoring of economic developments in the country. “Buoyed by expansionary fiscal policy, rapid state bank credit provision, a strong contribution of net exports, and more favorable market sentiment, the economy registered positive growth in the first half of 2019,” it said. Current positive market sentiment provides “good opportunity” to enact a set of reforms that would address vulnerabilities, strengthen policy credibility and set the economy on a higher and more sustainable growth path, it added. The report also stressed that the Turkish lira had recovered and that the current account had seen remarkable adjustment following a sharp depreciation in the currency in late 2018. Import compression, a strong tourism season, improved market sentiment and geopolitical developments have

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taken the pressure off the lira, according to the statement. Clearer monetary and intervention policy would further boost credibility, it highlighted. Underlining that inflation could drop to single digits over the coming months, it said, “High real policy rates, lira stability, favorable base effects, and resulting lower inflation have allowed the CBRT [Central Bank of the Republic of Turkey] to cut policy rates.” Turkey is looking forward

to the forthcoming New Economic Program (NEP), which should clearly diagnose the challenges facing the economy and outline a comprehensive set of policies to address them, it added. Turkey’s new economic program, announced in September 2018, targets a current-accountdeficit-to-GDP ratio this year of 3.3%. The concluding statement of the 2019 Article IV Mission is presented for approval to the IMF Board of Directors in Washington

OECD revises Turkey’s growth estimate,cuts global outlook to post-crisis low

he Organization for Economic Co-operation and Development (OECD) made a major revision in its projection for Turkish economic growth in 2019, as it warned about escalating trade tensions are eroding global growth prospects, with the world economy set for its slowest expansion since the global financial crisis. In an update to its economic forecasts from May, the biggest upward revision among the member countries the institution made was for Turkey. It now projects the economy would contract 0.3% this year. It had previously estimated the economy would contract 2.9%. On the other hand, it did not change its projection for 2020 and expects the Turkish economy to post growth of 1.6% Noting that Turkey’s GDP in the first half of 2019 was stronger than expectations helped by temporary fiscal and quasi-fiscal

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spending and strong tourism exports, the OECD said: “However, investment continues to contract and credit growth is still weak.” It noted that monetary policy easing should help growth to pick up modestly to just over 1.5% in 2020, provided domestic and international confidence is maintained. As it slashed its global forecast, the OECD warned the trade war between the U.S. and China has plunged global growth to its lowest levels in a decade. It said that the global economy risked entering a new, lasting low-growth phase if governments continued to dither over how to respond. The global economy will see its weakest growth since the 2008-2009 financial crisis this year, slowing from 3.6% last year to 2.9% this year before a predicted 3.0% in 2020, the OECD said. The Paris-based policy forum said the outlook had taken a turn for the worse

since it last updated its forecasts in May, when it estimated the global economy would grow 3.2% this year and 3.4% in 2020. “What looked like temporary trade tensions are turning into a long-lasting new state of trade relationships,” OECD Chief Economist Laurence Boone told Reuters. “The global order that regulated trade is gone and we are in a new era of less certain, more bilateral and sometimes assertive trade relations,” she added. Trade growth, which had been the motor of the global recovery after the financial crisis had fallen from 5% in 2017 into negative territory now, Boone said. Meanwhile, trade tensions have weighed on business confidence, knocking investment growth down from 4% two years ago to only 1%. Boone said that there was evidence

that the trade standoff was taking its toll on the U.S. economy, hitting some manufactured products and triggering farm bankruptcies. The world’s biggest economy would grow 2.4% this year and 2.0% next year instead of the 2.8% and 2.3% respectively that the OECD had forecast in May. China would also feel the pain with the second-biggest economy growing 6.1% in 2019 and 5.7% in 2020, outlooks the OECD cut from 6.2% and 6.0% previously. The OECD estimated that a sustained decline in Chinese domestic demand of about 2 percentage points annually could trigger a significant knock-on effect on the global economy. If accompanied by deteriorating financial conditions and more

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uncertainty, such a scenario would mean global growth would be cut by 0.7 percentage points per year in the first two years of the shock. Meanwhile, uncertainty over government policies was also hitting the outlook for Britain as it lurches towards leaving the European Union. The OECD forecast British growth of 1% in 2019 and 0.9% in 2020, but only if it left the EU smoothly with a transition period, a far from certain conclusion at this stage. The OECD had forecast in May growth of 1.2% and 1.0%. If Britain leaves without a deal, its economy will be 2% lower than otherwise in 2020-2021 even if its exit is relatively smooth with fully operational infrastructure in place, the OECD said.

The euro area would not be spared from negative spillovers under such a scenario and would see its gross domestic product cut by half a percentage point over 2020-2021. The OECD trimmed its forecast for the shared currency block, largely due to the slowdown in its biggest economy, Germany, which was estimated to be in a technical recession. Eurozone growth was seen at 1.0% – down from 1.2% in May – this year and 1.0% in 2020 - down from 1.4% in May. Boone said Germany’s economy had probably shrunk in the second and third quarters with a slump in car manufacturing, which accounts for 4.7% of German GDP, knocking three-fourths of a percentage point off German growth.

Turkey’s current account balance posts highest surplus

urkey’s 12-month rolling current account balance surplus totaled $4.4 billion in July, the highest figures since January 2002, according to Central Bank of the Republic of Turkey (CBRT) data released. On a monthly basis, the current account recorded a $1.2 billion surplus in the same month, improving from a $2.2 billion deficit in July 2018. In July, Turkish exports rose 7.8% year-onyear to hit $15.2 billion, while imports totaled $18.4 billion, falling 8.5% during the same period. The figures were translated into a $3.2 billion monthly foreign trade deficit, down from $6 billion in July 2018. In 2010 and 2011, when the Turkish economy registered the highest growth performance, the country’s current account balance registered the highest deficit. In October 2011, the current account deficit reached the highest value at $76.1 billion, the according to the central bank data. Yet the measures taken over time and the growth performance at historical average points have led to a contraction in the current account deficit over the years. The economic rebalancing period, which kicked off in September 2018 when the treasury and finance minister announced the New Economic Program (NEP), which included a number of substantial measures, has been reflected in the current account

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balance. The annual current account deficit has seen incremental decreases since May 2018 when it was calculated at $57.9 billion and at the end of last year the balance posted a $28 billion deficit. So far 2019 has seen sharp drops in the current account deficit. In June, it posted $1.1 billion in surplus. Anadolu Agency (AA) finance analyst and economist Haluk Bürümcekçi said August’s leading customs foreign trade data pointed to a very limited low foreign deficit compared to last year, suggesting that the rise in the current surplus is approaching the end. Bürümcekçi noted that in addition to the improvement in the headline data, the non-energy current balance, which is followed in terms of the basic tendency of the current balance, rose to a surplus of $41 billion, while the core current balance recorded a surplus of $45.6 billion. “The experts always underline that it is natural to see a significant decrease/ increase trend in the headline and core deficit during the periods of sharp contraction/growth of the Turkish economy,” he said. “As a matter of fact, there has been a notable recovery in energy and non-gold deficit in the last year with a stagnation followed by a recession in economic activity.” He further stressed that the l ower deficit in foreign trade compared

to the previous year and the high surplus in services balance were the main factors behind the improvement in current account transactions in July. $5 billion surplus in AugustBürümcekçi said the period of strong recovery in the current account balance might have ended and that the upcoming course will depend on growth. He also noted that it is critical whether the developments in the energy trade, which is one of the leading factors that increased the current deficit in the previous year, will continue, adding that the fall in oil prices below the 2018 average (at $72 per-barrel) continues to have a declining impact on the current account deficit. The net surplus of $8.2 billion run in gold trade in the first seven months last year declined to $4.1 billion in the same period last year and that this trend might continue, the analyst observed. He emphasized that tourism revenues will continue to recover with an upward trend in tourists, adding: “However, even though the economic activity started recovering from the bottom in the first half of the year, the weak national income growth might see stronger increases with the base effect. We think that this development might bring an increase in the foreign trade deficit on an annual basis. Moreover, the slowdown in the European Union market and global growth in general has come to affect our export growth rates negatively. Accordingly, we think that the last 12-month deficit, which we expect to reach a surplus of $5 billion at the end of August, might run a slight deficit at the end of 2019.

Banks lower car loan costs

Ali Bilaloğlu, chairman of ODD Three Turkish state-owned lenders, Ziraat, Halkbank and Vakıfbank, have lowered the monthly interest rates on car loans to support local production. They slashed the monthly cost of the 18-36 months loans for passengers cars produced in Turkey and sold at a price between 50,000 and 120,000 Turkish Liras to 0.49-0.69 percent, the banks announced in a joint statement.

The loans will be made available for first-hand cars. As part of the financing package, the banks have inked agreements with passenger car producers Fiat, Honda, Hyundai and Renault Mais. The lenders will also extend 30-60 months loans at the monthly interest rates between 0.49 percent and 0.69 percent for commercial vehicles sold for 72,000 and 120,000 liras produced by Fiat, Ford, Isuzu Karsan and Temsa. The financing package will be made available between Oct. 1 and Dec. 31. The latest data from the Automotive Distributors’ Association (ODD) showed that passenger car sales declined by 43.9 percent on an annual basis to 193,320 units in the first eight months of the year. The light commercial vehicle market

contracted nearly 52 percent year-onyear to 45,997 units sold in JanuaryAugust. Ali Bilaloğlu, the chairman of ODD, recently said that the Central Bank’s latest move to further cut its interest rates would likely to boost vehicle sales. The Turkish Central Bank on Sept. 12 lowered its policy rate (one-week repo rate) by 325 basis points to 16.5 percent from 19.75 percent. “The monthly borrowing costs of consumers may ease toward 1 percent. There is no doubt, this will have a positive impact on first-hand car sales,” Bilaloğlu said on Sept. 22. “The ODD’s latest estimate for vehicles sales for 2019 stood at 350,000 units. However, the rate cut can potentially push vehicle sales up to 400,000 units,” he said.

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at Rabobank told Bloomberg. Economists who spoke to the business news outlet noted that they expect the inflation to hit single-digits in October. Inflationary pressures have been a major concern on the Turkish economic agenda for the past year. While the consumer price index peaked in October 2018 with 25.24%,

the highest in more than a decade, the gradual decreases have been consistent since then. According to the statement released by the Central Bank of Republic of Turkey (CBRT), the developments in the domestic market and tight monetary policy continue to support the alleviation of inflationary pressures.

Lower rates may revive auto market

li Bilaloğlu, the chairman of the Automotive Distributors’ Association (ODD), has welcomed the Central Bank’s latest decision to further cut its interest rates, saying this move may reduce consumers’ borrowing costs and boost vehicle sales. The Turkish Central Bank on Sept. 12 lowered its policy rate (one-week repo rate) by 325 basis points to 16.5 percent from 19.75 percent. “This [the Central Bank’s rate cut] was a step in the right direction. Monthly borrowing costs of consumers may ease toward 1 percent. There is no doubt, this will have a positive impact on first-hand car sales,” Bilaloğlu said. He cited three factors affecting vehicle sales: The price of vehicles, consumer confidence and financing conditions. “Foreign exchange rates and taxes are part of the prices. The consumer financing conditions are directly related with banks’ appetite for lending loans and interest rates,” Bilaloğlu said.

September 2019

He said that their calculations suggest that when the interest rate on car loans is around one percent, the automotive market expands. Following the Central Bank’s rate cut, they are expecting higher sales in the automotive market, Bilaoğlu added. “Forecasts for this year have been revised upwards by 50 percent in the wake of the rate cut. The ODD’s latest estimate for vehicles sales for 2019 stood at 350,000 units. The ODD has not yet collected new estimates from its members. We are currently working on this. “However, the rate cut can potentially push vehicle sales up to 400,000 units,” he said. Earlier in September, Bilaloğlu suggested that with a boost from lower interest rates, local carmakers may see better sales in the last four months of the year. “I am expecting car sales to exceed the average sales seen in SeptemberDecember period of the previous years,

thanks to the decline in interest rates and other factors,” he said on Sept. 17. The automotive market narrowed nearly 46 percent year-on-year in the January-August period as passenger car and light commercial vehicle sales totaled 239,317 units. Some 193,320 passenger cars were sold, dropping 43.94 percent compared to the first eight months of 2018. The light commercial vehicle market contracted 51.86 percent to 45,997 units. Some 621,000 automobiles and light commercial vehicles were sold last year, down from 956,194 in 2017. Prominent automotive manufacturers including Fiat, Ford, Honda, Hyundai, Mercedes, Renault, and Toyota have manufacturing operations in Turkey, which is among the world’s top auto sale markets. In Turkey, a total of 620,937 automobiles and light commercial vehicles were sold last year, down from 956,194 in 2017.

Turkey targets over 5% sustainable growth

urkey targets a growth rate over 5% or more in coming years, President Recep Tayyip Erdoğan said. The country also aims to fall the inflation rate below 5% and to lower the unemployment rate under 10% at the end of New Economic Program for 2020-2022, Erdoğan told his party members during the ruling Justice and Development Party’s (AKP) 29th Consultation and Assessment meeting in Kızılcahamam, a retreat town of capital Ankara. Revealed by Treasury and Finance Minister Berat Albayrak at the end of September, the new program unveiled Turkey’s targets for inflation, growth, unemployment, budget deficit, current account, and financial stability. The program targeted the inflation rate of 4.9%, the unemployment rate of 9.8% and the growth rate of 5% for 2022. The inflation rate, which saw the over 25% level in 2018, dropped to 9.26% in September. “Interest rates dropped to a reasonable level with appropriate interventions of the Central Bank, I believe that they will drop more,” he said. Turkish Central Bank’s policy rate -- ranged between 8% and 24% last year -- fell to 16.50% in early September. The next monetary policy meeting for determining interest rates on Oct., 24. “We will follow our economic road map in the next four-year period without an election and reach our 2023 targets,” he underlined. He noted that Turkey is determined to use sources and saving based budget management efficiently. “Turkey will keep the budget-deficit-to-GDP ratio under 3%,” he added. The New Economic Program also targeted to keep the budget-deficit-to-GDP ratio at 2.6% in 2022. The current deficit problem ended permanently in the country with the support of structural reforms, Erdoğan added. The president stressed: “Turkey will promote value-added production and support SMEs strongly in every field from accessing markets to financing.” He also added that the country will start to produce boron carbide, which is used in tactical and armored vehicles, helicopters, aircraft, and personnel protective vests.

Antalya exports 428 luxury yachts worldwide

Zeki Gürses, Antalya Free Zone Founder and Operator Inc. (ASBAŞ) General Manager

editerranean city of Antalya have been sold all over the world, according to Antalya Free Zone Founder and Operator Inc. (ASBAŞ) General Manager Zeki Gürses. Yachts that were manufactured in the Antalya Free Zone and had received orders from many countries, including Italy, the U.K., the U.S., Russia and the United Arab Emirates (UAE), have generated nearly $1.13 billion in income, Gürses told. Yacht

September 2019

manufacturing in the region began in 2000, he noted. Of 87 companies in the region, 48 operate in the yacht sector, Gürses said, adding that yachts up to 30 meters in length were produced in the first years, while the length of yachts has risen over the years. Indicating that the current capacity is 50 meters, Gürses said that yachts up to 63 meters can be produced now. Pointing out that the longer the yacht, the higher added value it brings, he

stated that the national economy is affected by this rise in a parallel way. Emphasizing that they have initiated efforts to expand the yacht production area in the region, Gürses said that they will be able to produce yachts of up to 90 meters and 2,000 tons once the investment is completed. Noting that they delivered 34 luxury yachts to their owners in the first eight months of this year, Gürses continued that the total sales value of these yachts was $50.5 million. Remarking that each yacht produced has brought prestige to the region, he stated that the number of orders increases as the quality of the yachts is understood. Confirming that a large majority of yachts produced are displayed in fairs in Dubai, Monaco and Cannes, Gürses stressed that yachts are built on order and designed according to the customer’s request. “We sell yachts all over the world, including Italy, which leads the luxury yacht sector, the Netherlands, Dubai, the U.S., Spain, Russia and the U.K. A 50-meter yacht is delivered in about two years,” he concluded

Istanbul jumps in Global Financial Centers Index

stanbul climbed up six places and ranked 53rd in the Global Financial Centers Index (GFCI). The index, published by London-based Z/Yen Partners in collaboration with the China Development Institute, provides evaluations of future competitiveness and rankings for 104 major financial centers around the world. The GFCI is updated every March and September and receives considerable attention from the global financial community, serving as a valuable reference for policy and investment decisions. The survey showed that 31 of the 104 centers fell in the ratings, including all

October 2019

of the top five. New York maintained its position at the top of the index, extending its lead over London from seven to 17 points. London held onto second place in the index, but fell 14 points in the ratings. It was followed by Hong Kong, standing two points behind London. Strong performances from other centers, especially Paris saw a 29-point rise, putting London’s second place in the index at risk next time. The survey noted that trade wars, geopolitical unrest and Brexit are introducing significant adjustments to medium-term perceptions.

Shenzhen, Dubai and Sydney entered the top ten, easing out Toronto, Zurich and Frankfurt. Citing GFCI results, Turkish Presidency Finance Office said in a statement that Istanbul’s rank would further improve after the completion of Istanbul Finance Center (IFC) project by 2022. In the Eastern Europe & Central Asia region, Kazakh capital Nur-Sultan – formerly Astana – retained its top ranking, consolidating its position despite being a recently formed financial center. Istanbul became the second-best performer in the region, the statement underlined.

New industry road map to help to become competitive player Turkey unveiled an industry and technology road map for 2023 that will help it become competitive in critical technologies and make it an important player in the global league. On this path, among others, the government aims to raise the manufacturing industry’s share of gross domestic product (GDP) as well as exports by the industry. The Industry and Technology Ministry has set five main components and 23 sub-policies, Industry and Technology Minister Mustafa Varank told a news conference in the capital Ankara to announce Turkey’s industry and technology strategy for 2023. Varank listed the main components as High Technology and Innovation, Digital Transformation and Industry Move, Entrepreneurship, Human Capital and Infrastructure. “Our first component is High Technology and Innovation to make our country competitive in critical technologies and turn it into an important player in the global league. With the second component, Digital Transformation and Industry Move, we will take concrete steps for technology-oriented industrialization,” Varank added. “With the policies that we will implement in the field of entrepreneurship, we will increase

October 2019

the number of entrepreneurs in the whole process from idea to product and further strengthen the ecosystem. The policies we will implement in the transformation of Human Capital and the field of Infrastructure will be the accelerators of the road to success.” Turkey is looking to significantly boost manufacturing’s share of the country’s GDP by 2023, Varank said. “We aim to increase this share, which was 16.5% in the past decade, to 21% in 2023. For an innovative and more advanced industry, we want to increase the added value per worker in the industry to $35,000 and manufacturing industry exports to $210 billion,” Minister Varank further stressed. “As part of this, we hope to increase the share of medium and high-tech products in manufacturing industry exports to 50%,” he said. The share of research and development [R&D] expenditures in GDP should reach 1.8%, said Varank. “We will raise the human resources in this field [R&D] to 300,000 and the number of researchers to 200,000,” he said. Turkey hopes to boost annual investments in technology-based businesses to TL 5 billion by 2023, the nation’s centennial, Varank added. “In the fields of disruptive technology, we

want our country to produce at least 23 smart products that will become global brands,” he said. Pointing out that worldwide, the number of unicorns – privately held startups valued at over $1 billion – totals around 300, Varank said: “Let unicorns be established in our country and successfully make their mark, we even want them to be called Turcorns.” The country aims to have 10 such “Turcorns” by 2023, the nation’s centennial, Varank added. Varank also said that an artificial intelligence institute is being set up to do R&D work and added value projects in the field. Touching upon recent developments in brief interview with Daily Sabah after the event, Varank said current conditions and landscape for direct investments in Turkey are very suitable and positive. “We have already been observing many good signs,” he noted. Varank added that Turkey facilitates better conditions despite the current turmoil in finance markets. “No doubt, direct investments are important for a healthy economy. However, now there is turmoil in financial markets and negative interest rates in some economies around the world. These investments will look for other opportunities for sure,” he said. Since Turkey is more interested in the long-term, with high value-added investments, he said the ministry has also been working to enhance the investment climate in Turkey along with the Presidential Investment Office. “Our president also gives great importance to investments and wants big breakthroughs in the near future. As the ministry, we coordinate and give incentives for research and development. We already have a very positive climate on investments in Turkey. There are also global firms that build-up their research and development applications in Turkey. We have huge, young, skilled and talented human resources in our country. The current young human resource and investments climate, which is also supported by these incentives, make Turkey a very suitable and attractive country for industrial investments and research and development. Turkey is the ideal country now. We see many indicators already,” the minister concluded

Turkish auto sector records rising exports to European Union The automotive sector, the engine of Turkish exports, achieved $1.3 billion in exports to European Union countries in August, an increase of nearly 10% compared to the same month last year. According to the UludaÄ&#x; Automotive Industry Exporters Association (OIB) and Turkish Exporters Assembly (TÄ°M), the Turkish automotive industry raised its exports by 8.4% in August compared to the same period last year. With a 13% share in Turkish exports,

October 2019

the automotive industry ranked first again and reached the second-highest August export figure in its history, achieving the highest growth rate of 2019 with 8.4%. The increase in exports to EU countries was instrumental in reaching the highest August export figure for the second time in the history of the sector. EU members took first place in August exports in the country group with a 72% share and $1.3 billion. While August

exports to the eurozone climbed by 10% compared to the same period last year, exports to France, Italy, Britain, Spain, the Netherlands, Slovenia, and Belgium was effective in this increase. 14 out of 28 EU member countries experienced an increase in exports. Exports to Germany, which took the lead in monthly exports, saw a 0.4% decrease in August to $290.7 million. France was the second-largest market with $182.2 million, while the automotive exports to this country surged by 26.5% compared to the same period of 2018. Exports to Italy, the third-largest market, rose by 18% and reached $151.4 million. With a 4% increase and $134.6 million in exports, the U.K. ranked fourth. Among the top 10 countries in exports, other EU members included Spain in fifth place with $96 million and an increase of 2% and the Netherlands in seventh place with around $70 million and a 79.5% growth compared to the same period of the previous year. Exports to Slovenia came eighth on the list, reaching $64.4 million with an increase of 104%, while Belgium ranked 10th in Turkeyâ&#x20AC;&#x2122;s automotive sector with $52.3 million, surging 8%.

Turkey’s automotive exports increased

by sales to US, Netherlands

he Turkish automotive industry reached $2.9 billion in foreign sales in July with an increase of 5% compared to the same month of the previous year, achieving the highest export growth in 2019 on a monthly basis. The high automotive export figures were boosted by the substantial increase in sales to the Netherlands and the U.S., which saw a rise of 131% and 55%, respectively. According to Uludağ Automotive Industry Exporters Association (OIB) and Turkish Exporters Assembly (TİM) data, exports by the automotive industry increased by 5% in July compared to the same month of the previous year. This export data was also recorded as the fourth highest foreign sales figure in the history of the automotive industry on a monthly basis. The increase in exports of passenger cars and buses, minibuses and

October 2019

midibuses in July reflected positively on the sector’s exports. The share of the automotive industry, which ranked first in Turkey’s foreign sales, from the country’s overall exports stood at 18%.

Germany led the way in Turkey’s automotive exports with $413.6 million. Exports to this country increased by 5% compared to the same month of the previous year.

Automotive manufacturers traded on BIST enjoy rising profits in first half

he net profit of automotive manufacturers whose stocks are traded on the Borsa Istanbul Stock Exchange’s benchmark index BIST100 has risen 1.13%. The shares of eight automotive companies, including Tofaş, Ford Otosan, Türk Traktör, Anadolu Isuzu, Tümosan Motor ve Traktör, Doğuş Otomotiv, Karsan Otomotiv and Otokar are traded on Borsa Istanbul, and the aggregate net profit of these companies for the period January through June reached TL 1.77 billion, compared to TL 1.74 billion in the same period last year. Despite the cumulative net profit of the aforementioned auto companies on BIST, three of them posted net losses, while five enjoyed profits. In the first six months, profits for Tofaş surged, while Ford Otosan and Türk Traktör posted decreases in profits. Moreover, Anadolu Isuzu and Tümosan Motor and Traktör announced losses in the first half of last year and in the same period this year. Doğuş Otomotiv, as opposed to profits last year, suffered losses in the first half. Karsan Otomotiv and Otokar managed to turn last year’s losses into profits in the first half of this year. In the first half of this year, Ford Otosan profits increased 5.81% compared to the same period last year, securing TL 733.2 million, up from TL 692.9 million in the same period in 2018. The company’s net profits decreased by 3.29%, falling to TL 888.2 million, down from TL 918.5 million in the first half of 2018. Türk Traktör’s net profits dropped by 84.3% to TL 358.998 million as opposed to net profits

October 2019

recorded of TL 136.7 million in the first half of last year. Anadolu Isuzu posted TL 15.7 million losses in the first six months. The company managed to decrease the amount of losses, which were recorded at TL 31.4 million in the same period last year. Tümosan Motor and Traktör suffered from rising losses in the first half. The tractor manufacturer’s losses rose from TL 6.2 million in the JanuaryJune period last year to TL 18.7 million in the same period this year. Doğuş Otomotiv, after securing TL 136.7 million in profits in the first half of last year, posted TL 44.1 million in losses in the same period this year. Moreover, Karsan Otomotiv managed to write off TL 8.3 million in profits in the first half as opposed to TL 19.9 million last year in the same period. In the same vein, Otokar generated TL 195.3 million in profits, which were TL 78.7 million losses in the first six months of last year. The sales of automotive companies whose shares are traded on the stock market rose by 3.9%, reaching TL 36.1 billion in the first half. Otokar’s sales surged 163% and hit TL 1.2 billion in the first half of the year, the highest sales increase among automakers on the Borsa Istanbul. Karsan Otomotive also recorded a 23% rise in sales and generated TL 758.6 million, while Ford Otosan saw an increase of 18.9% in sales and secured TL 18.2 billion. In the same period, the sales of Doğuş Otomotiv decreased 31.25% in sales, while sales of Tümosan Motor ve Traktör and Türk

Traktör fell respectively by 20.65% and 18.12%. Anadolu Isuzu also saw declines in sales by 11.4% and Tofaş Otomobil posted 2.3% drop in sales. The shares of eight automobile manufacturers traded on the Borsa Istanbul rose by 12.6%, while the BIST100 rose 5.7% in the first half. Otokar ranked first in stock market performance as the company’s shares soared 32.7%, followed by Ford Otosan with 31.5%. Doğuş Otomotiv shares recorded an upward movement at 25.8%, followed by Tofaş whose shares rose 24.4%. Anadolu Isuzu recorded an increase of 15% on its shares on the BIST100. Shares of Tümosan Motor and Traktör devalued by 14%, and Türk Traktör’s shared declined by 9.3%. Karsan saw a 4.6% decrease in the value of its shares on the stock market.

Over 300,000 motor vehicles registered in Turkey in January-June 2019

total of 313,213 first- and secondhand vehicles were registered in January-June, Turkish Statistical Institute (TurkStat) announced. The total for the first half of 2019 was down nearly 42% from the same period last year, TurkStat said in a statement. While 134,373 road motor vehicles

October 2019

were withdrawn in the same period, the total number of road motor vehicles registered increased by 178,840, the statement said. The statement said registration of 134,373 vehicles were also withdrawn in the first six months of the current year. Automobiles accounted for the bulk

of new registrations with a share of 55% while motorcycles accounted for 25%. TurkStat data showed that the total number of road motor vehicles registered reached 23 million by the end of June. In June, Turkey saw 41,915 new registrations of road motor vehicles, falling 35% year-on-year

Fall in Turkey’s inflation signals further rate cuts, report says The resume of price slowdown will enable Turkey’s Central Bank to carry out more cuts, as the country’s inflation hit a 15-month low in August, an analysis by Bloomberg said. “Unless the lira weakens markedly, the central bank will continue to cut rates to ease the burden on the economy,” Piotr Matys, a London-based strategist at Rabobank told Bloomberg. Economists who spoke to the business news outlet noted that they expect the inflation to hit single-digits in October. Inflationary pressures have been a major concern on the Turkish economic agenda for the past year. While the consumer price index peaked in October 2018 with 25.24%, the highest in more than a decade, the gradual decreases have been consistent since then. According to the statement released by the Central Bank of Republic of Turkey (CBRT), the developments in the domestic market and tight monetary policy continue to support the alleviation of inflationary pressures.

Turkish auto industry eyes over $500M in exports to Russia

he leader of national exports, Turkey’s automotive industry expects its exports to Russia to exceed $500 million in 2019, according to the vice-chairman of the Uludağ Automotive Industry Exporters Association (OİB). Orhan Sabuncu’s remarks came after the MIMS Automechanika Moscow Fair, the leading exhibition of automotive spare parts, automotive components, equipment and vehicle maintenance products in Russia and Eastern Europe. OİB, the only representative of the Turkish automotive industry in exports, led the national participation organization consisting of 52 Turkish companies in the fair held from Aug. 26-29 in order to develop cooperation opportunities with Russia, one of Turkey’s most important trade partners, and to accelerate exports. According to a statement by the association, the companies had the chance to introduce their products and services including automotive subindustry products, commercial vehicles,

October 2019

interior design, security equipment, engine parts and pieces, sound systems and telecommunication. In addition, Turkish automotive companies attending the fair within the scope of the International Moscow Automotive Forum events (IMAF), which took place simultaneously with the fair, held bilateral business meetings. They met with both Russian buyers and sector representatives from all over the world to build new commercial connections. In his speech at the panel, “The Future of the Russian Automotive Industry,” Sabuncu said they aim to reach a record number of participants next year. According to Sabuncu, as a result

of the development of economic relations between Russia and Turkey, there has been an increase in mutual trade between the two countries. The trade volume between the two countries was $25.7 billion in 2018. Turkey’s exports to Russia amounted to some $3.4 billion, while its imports stood at $22.3 billion. The two countries are now exploring ways to increase their trade volume as they have set their eyes on the bilateral trade target of $100 billion, set by their leaders, Recep Tayyip Erdoğan and Vladimir Putin. Pointing out that the automotive industry is one of the critical sectors for both Russia and Turkey, Sabuncu continued, “Therefore, there are many potential areas of mutual cooperation with Russia, and we are working hard to build and develop this cooperation. Our country’s automotive exports to Russia, which in recent years reached $1.2 billion and then saw a period of decline, have been on the rise again in the last two years. We expect our automotive exports to Russia to exceed $500 million in 2019.”

Sakarya exports 91% of vehicles produced in 7 months

ne of the most important automotive hubs in Turkey, Sakarya, exported 91% of the 164,714 vehicles it produced in the northwestern province in the January-July period. Home to manufacturers such as Toyota, Otokar and TürkTraktör, the province, which shoulders 19.6% of the country’s automotive exports, generated nearly $2.9 billion from exports of 149,977 vehicles in the said period. The province increased its exports by 1.2% compared to the same period 2018, when it exported 148,078 vehicles.

September 2019

Sakarya, which remains seventh in exports after Istanbul, Kocaeli, Bursa, İzmir, Ankara and Gaziantep, earned some $3.15 billion from exports in automotive, ferrous and non-ferrous metals, air-conditioning, chemicals and chemical products, machinery and machine parts industries in the January-July period. It carried exports to 131 countries and 11 free zones in said period. According to Automotive Industry Association (OSD) data, 151,614 automobiles, 436 midibuses, 529 buses, 123 pick-ups and 12,012 tractors were manufacture in the

facilities in the province. A total of 784 vehicles were produced in the city on a daily basis in the same period, out of which 714 were exported. The province alone met 18.7% of Turkey’s vehicle need in the said period. Toyota led the way among manufacturers and exported 92% of the vehicles produced. It exported 140,003 vehicles in the January-July period. It was followed by TürkTraktor with 9,196 vehicles. Otokar exported some 778 vehicles in the said period, corresponding to an increase of 157% compared to the same period of last year.

Turkey grants TL 28B in support to auto industry

urkey, seen as having the best chance to host the new factory of German carmaker Volkswagen, has been the investment base of the automotive industry over the last five years. While the number of incentive certificates granted to the automotive sector in the last five years has reached 715, TL 28 billion has been provided for investments in this period. Industry and Technology Minister Mustafa Varank said Turkey’s first aluminum injection factory, which was founded in the northwestern province of Bursa for new generation hybrid vehicles within the scope of the government’s project-based incentive system, will help cut Turkey’s current account gap by $2.3 billion a year. While the domestic car is expected to be on the roads in 2021, the government has prepared a support program to promote the production of high-tech brand vehicles. New steps will be taken under many headings, from special incentives for domestic electric buses to infrastructure suitable for new generation vehicles. Speaking of the developments in the automotive sector and the domestic automobile project, Varank said the automotive industry produces over 1.5 million units annually. “Our country has an attractive incentive system for automotive investments,” he said. “Automotive, one of the leading sectors of the industry with its export volume, ranks first in the

October 2019

manufacturing industry. The vehicles manufactured in Turkey stand out with their technical features, performances, design, and quality. We support 150 R&D [research and development] design centers in this regard.” The minister also pointed to the 28,000 jobs produced with the investment incentive certificates given to the sector in five years, highlighting the continuous communication with the automotive sector through the works carried out by the Technical Committee on Motor Vehicles. “Some 335 pieces of legislation have been published within the scope of legislative harmonization studies, and work on publishing 1,400 pages of legislation is underway,” he continued. Varank further stated that the five major industrialists that make up Turkey’s Automobile Joint Venture Group (TOGG) continue to work intensively on the country’s first domestically manufactured automobile. Accordingly, the incentive mechanism for the domestic brand automobile project will be developed. Branding will be encouraged with the domestic brand vehicle project aimed at the needs of both domestic and foreign markets. With the automotive support program, technology and production

capability will be developed in fields such as batteries, sensors, fuel cells and software. Battery investments will be made for electric automotive production. The establishment of an industrial cloud platform for the automotive sector will be supported. The industrial cloud platform, which will be offered to companies as a digital infrastructure and service center, will be established for the automotive sector in the first stage. A support program for research on technological development, marketing, and branding will be implemented. The international market share will be increased by developing high-tech domestic brand vehicle production and a highly competitive supply industry. To maintain the competitiveness of the automotive industry, new steps will be taken by considering global developments, new technologies and changing customer expectations. In this context, critical technologies, such as environmental technologies, connected and autonomous vehicles, and smart mobility, will be developed. A suitable infrastructure will be produced for the new generation vehicles. Legislation on the collection, use and conversion of data from new-generation vehicles to value-added services will be completed.

Exporters hail new master plan as guideline to enhance operations

urkey’s first Export Master Plan, which was announced by Trade Minister Ruhsar Pekcan, has been welcomed by the exporters as a guideline that would help them reach mid-term goals. The plan, prepared in close cooperation with relevant stakeholders, aims to extend the positive performance in foreign sales in the years to come and increase the volume of high-tech and value-added exports. Commenting on the road map, Turkish Exporters’ Assembly (TİM) Chairman İsmail Gülle said the new master plan will have positive impacts on Turkish exports. “We cannot expect an immediate outcome on the figures, but we have already seen some record performances this year. We will certainly see the results of the plan in

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the upcoming period,” Gülle said. “One of the most important topics in the plan is trade financing. Therefore, it will function as an important road map to achieve targets with the support of Turk Eximbank and other financial institutions,” Gülle added. As part of the new export road map, the Trade Ministry identified five target sectors and 17 target countries, where it wants to double Turkish exports. These countries include the U.S., Brazil, China, Ethiopia, Morocco, South Africa, South Korea, India, Iraq, the U.K., Japan, Kenya, Malaysia, Mexico, Uzbekistan, Russia and Chile. These countries make up 60% of the global gross domestic product (GDP). They are responsible for 43.7% of global imports and are destinations for 25.2% of Turkish exports. In

addition, the ministry prioritized five target sectors, including machinery, automotive, electric-electronic, chemical and the food industry. The new plan also outlines a strategy for special free-trade zones, areas with special regulatory treatment for businessmen and investors that aim at promoting export-oriented investment and production, accelerating foreign direct investment and technology access, directing enterprises toward exports and developing international trade. Through these special zones, Turkey aims to increase the current 3.5% share high-tech products have in overall exports to 5%. “We aim to increase high-tech production and attract foreign investors to our country with the support we will provide to these regions,” Pekcan said.

Volvo’s electric brand Polestar inaugurates China factory with exports to US, Europe on sight

mid rising trade tension, Volvo’s electric brand, Polestar, is going ahead with plans to export its first Chinese-made model to the United States next year, the automaker’s CEO said. Polestar opened a factory in the western city of Chengdu to produce the Polestar 1, a two-door, gasoline-electric hybrid coupe with a carbon-fiber body. European sales of the Polestar 1 start this year, priced at about 150,000 euros ($165,000), said Polestar CEO Thomas Ingenlath. He said U.S. sales are due to start early next year. Volvo Cars has been owned by Chinese automaker Geely Holding since 2010. President Donald Trump is due to

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announce possible action on auto imports in November following an investigation into whether they harm national security. Trump said Washington would hold talks with the European Union, Japan and possibly others that will likely seek to reduce imports. China exports few vehicles to the United States, but Trump has imposed punitive duties of up to 30% on other Chinese imports in a fight over trade and technology. Some manufacturers are shifting production out of China to avoid Trump’s tariff hikes. “We obviously would really like political leaders to bring equal tariffs to

develop fair and free trade between all countries,” Ingenlath said. “The task ahead for the world, and I think each politician should embrace as well, is really very much working on the environmental question,” he said. “That is where all the energy and all the discussion should be.” Regulators in Europe, China and other markets are promoting electrics with subsidies, sales quotas and other tools. Last year’s global sales of pureelectrics and hybrids totaled 2.1 million, according to the International Energy Agency. That was equal to about 2.3% of global auto sales of 86 million units. Polestar’s goal is to “bring this internal combustion market over to the side of electric mobility,” Ingenlath said by phone from Chengdu. The Polestar 1 promises a range of 150 kilometers (95 miles) on a charge, with a gasoline-powered engine to supplement that if needed. The company says it will follow up with an all-electric model and an SUV. Polestar joins an increasingly crowded luxury electric market dominated until now by U.S.-based Tesla Inc., which is building a Chinese factory in Shanghai. It isn’t clear how many consumers want electrics despite official pressure on automakers to develop them, according to Bernstein analysts Max Warburton and Thanos Hadjiantonis. “Consumer enthusiasm for EVs remains quite limited,” they wrote in a report.

Turkey identifies 17 countries, 5 sectors for sustainable exports

mbarking on a quest for sustainable exports, Turkey has now launched an approach that includes the unleashing of long-term export potential and puts forward a sustainable strategy that will help the country multiply its exports. As part of the Export Master Plan, which was prepared as a result of meticulous efforts carried out by the Trade Ministry in close cooperation with relevant stakeholders, Turkey aims to extend the positive performance in foreign sales to coming years and develop, increase the volume, tech composition and valueadded of the exports. As part of the new road map, it has selected 17 target countries to where it aims to double its exports, and five target sectors, said Trade Minister Ruhsar Pekcan at the announcement ceremony for the plan in Istanbul. “These countries include the U.S., Brazil, China, Ethiopia, Morocco, South Africa, South Korea, India, Iraq, the U.K., Japan, Kenya, Malaysia, Mexico, Uzbekistan, Russia and Chile,” Pekcan said. Combined, these countries make up 60% of the global gross domestic product (GDP), are responsible for 43.7% of global imports and are destinations for 25.2% of Turkish exports. In addition, the ministry prioritizes five target sectors, including

October 2019

machinery, automotive, electricelectronic, chemical and the food industry, Pekcan added. “We aim for a sustainable export approach within the scope of the plan,” she said. The new plan also outlines a strategy for special free-trade zones, areas with special regulatory treatment for businessmen and investors that aim at promoting export-oriented investment and production, accelerating foreign direct investment and technology access, directing enterprises toward exports and developing international trade. Through these special zones, Turkey aims to increase the current 3.5% share high-tech products have in overall exports to 5%, the minister said. “We aim to increase high-tech production and attract foreign investors to our country with the support we will provide to these regions,” Pekcan noted. Elaborating on the plan’s preparation process, Pekcan underscored that they took into account targets set out in the 11th Development Plan, noting that they aim for $226.6 billion in exports. The five-year development plan, covering the period from 2019 to 2023, was ratified by Parliament earlier last month and identifies the production of high value-added, medium-high and high-tech products, using domestic

facilities and capabilities as one of its main priorities. Pekcan went on to say that the actual target would be to even go over this target by closely following the global trade wars and technological transformations. The minister underscored that, with a “target country, target sector” approach, they are aiming to double the share Turkey has in imports of the target countries. What’s more, an aim will be to follow and catch the sectoral trends in the world and become a successful exporter in these sectors, Pekcan added. In this context, she pointed to current shares certain sectors have in global trade, noting that textile and ready wear has a 4.4% share in global exports, while it has a 17% percent share in Turkey’s exports. While the automotive sector’s share in global exports stands at 12.2%, the same figure in the country’s exports is at 15.2%. In addition, machinery has a 12.5% share in global exports, a figure that stands at around 14.2% in Turkey. Chemical industry products hold an 11.2% share in the world, while the same figure stands at around 6% in Turkey’s exports. “We have a need for an increase in exports of the chemicals sector,” Pekcan noted. “What’s more important, the share of software and informatics in global exports is 10.5% but in Turkey, this share is 1.3%,” she added. On the other hand, she also highlighted the ministry’s efforts in digitalization. “We have a very new study called Smart Export Platform, a three-stage project. It includes a comprehensive study that will be completed in six months, 12 months and 18 months,” Pekcan said. “We implement blockchain applications in every field of foreign trade. With our e-export strategy, we open up our exporters, especially our SMEs [small and medium-sized enterprises], to the world,” she noted. Pekcan emphasized that by making fast, easy and safe applications in digitalized customs, they provide both time and financial gain in exporters’ transactions.

Gürcan Karakaş, CEO of Turkey’s Automobile Joint Venture Group (TOGG),

Yet to be unveiled, Turkey’s domestic car draws huge public interest

ver since the first announcement in late 2017, Turkey and its citizens have been excitedly waiting to see the design and prototype of the first domestically manufactured car, and even more, the day it hits the road for the first time. The country has waited for a long time to have its own car brand. It attempted to produce its first car in 1961 – the Devrim (Revolution) was unsuccessful after production and was halted following the first prototypes. Now there are only two years left before the Turkish public starts seeing it on the country’s highways. Even though its design and prototype have not been revealed yet, people have shown great interest in the car. “Although we have slightly more than two years before we hit the market, hundreds of our citizens

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are already expressing their desire to make a prepayment and be one of the first to purchase the vehicle,” said Gürcan Karakaş, the CEO of Turkey’s Automobile Joint Venture Group (TOGG), formed by the five largest Turkish industrialists that will develop the country’s first domestically manufactured automobile. In November 2017, Turkey ventured into a groundbreaking initiative to manufacture its first domestic automobile. The project has brought together the country’s largest manufacturers and companies in a consortium that includes Anadolu Group, BMC, Kök Group, Turkcell and Zorlu Holding, all experienced in their own areas of operation. The initiative came after repeated calls from President Recep Tayyip Erdoğan

for a joint car project by the Union of Chambers and Commodity Exchanges of Turkey (TOBB) and the Industry and Technology Ministry. The five domestic firms now with 19% shares each, and the TOBB with 5% of the share lead the TOGG joint venture. The indigenous automobile is said to be ready for mass production by 2022, with exports expected to begin two years later. The project is expected to contribute TL 50 billion to the gross domestic product (GDP), TL 7 billion to the current account deficit and add around 20,000 jobs through direct or indirect employment. Works on the project are underway and are going on at full speed. A prototype of a sport utility vehicle (SUV), the first vehicle that will be available for sale, will be unveiled in December.

“It [the prototype] will be a moving vehicle in real dimensions,” Karakaş told, assessing the final situation related to the project in the German capital of Berlin. The first 3D prototype, based on a 1:4 scale, of the domestically produced car was showcased on Aug. 5 during a council meeting of the TOGG. Karakaş emphasized that the prototype of an SUV in the C segment, which is innately electric, will not only be a model, but also a moving vehicle. “The photos of the vehicle, whose intellectual and industrial property rights are completely owned by TOGG, will be disclosed as of December,” he added. Then TOGG CEO noted that electric vehicles in Turkey are evaluated in three different tax categories based on their engine power. The vehicles that do not exceed 85 kilowatts are imposed a 3% excise duty (ÖTV) while those that are between 85-120 kilowatts with an ÖTV rate of 7% and those that are above 120 kilowatts with an ÖTV rate of 15%. Pointing out that they will offer a power option for each category, Karakaş continued, “As Industry and Technology Minister Mustafa Varank remarked earlier, we will have an option with a capacity to travel 500 kilometers with one-time charging.”

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It will be a smart vehicle, Karakaş noted, indicating that it will consist of smart subsystems and can be connected to smart devices. Karakaş emphasized that the electrical and electronic architecture to be used in other models to follow the vehicle in question has already been designed. “When our vehicle goes on to the market, it will have autonomous driving characteristics required by competition, and its battery will consist of lithium ion cells at the last level. At the same time, robotics and network technologies will be used

in the production of our vehicle within the framework of Industry 4.0. Final assessments are being made on where the factory will be set up,” said Karakaş. “The location of the factory will be announced soon,” he added. Highlighting that they aim to launch the domestic vehicle with a five-star crash test safety rating in current conditions, Karakaş concluded, “The car manufactured in Turkey and planned to be exported to foreign markets after a while will certainly be accessible and innovative in both service network and parts supply.

Turkey to attract more FDI despite global reduction

aving received around $13 billion in foreign direct investment (FDI) in 2018, Turkey will continue to attract more investments from across the globe, according to strategist and analyst Cüneyt Paksoy. Commenting on the 2019 Global Investment Report of the United Nations Conference on Trade and Development (UNCTAD), Paksoy said Turkey attracted more investment in an era when the global FDI was seeing a downward trend. If Turkey diversifies investment instruments and completes its reforms in justice, education, agriculture and livestock, it can steer global FDI, Paksoy told. Last year, the FDI received by Turkey increased by 13%, while the global flows of FDI saw a decrease of

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13% to drop $1.3 trillion, according to the report published in June. The decline – the third consecutive year’s fall in FDI – represents the lowest level since the global financial crisis and according to the report, underlines the lack of growth in international investment this decade. The report said FDI dropped by 27% in developed countries, while developing country flows managed to hold steady, climbing by 2% and 4% in developing Asian economies, which helped push flows to the developing world to more than half, or 54%, of the global flows, a record, from 46% in 2017 and just over a third before the financial crisis. FDI inflows to developing Asia rose by 4% to $512 billion in 2018.

“Growth occurred mainly in China, Hong Kong, Singapore, Indonesia and other ASEAN countries, as well as in India and Turkey,” according to the report, which emphasized that Asia continued to be the world’s largest FDI recipient region, absorbing 39% of global inflows in 2018, up from 33% in 2017. “Four countries absorbed approximately 90% of the FDI in West Asia. Turkey was the largest recipient, with inflows rising by 13% to $13 billion, despite slower than usual economic growth and uncertainty surrounding the Turkish lira,” the report noted. FDI inflows to Turkey in 2013, 2014, 2015, 2016 and 2017 amounted to $13.46 billion, nearly $13 billion, $19 billion, $13.7 billion and $12.94 billion, respectively. Turkey makes structural reforms and provides financial balance, Paksoy said, also stressing its production-based growth and its increase in exports and tourism revenues. Foreign investors did not lose confidence in Turkey, he said, adding that the FDI flow to the country was not cut, and foreign investors consider Turkey’s steps. “Turkey became a strong country in its region and in the world. It is a factor before the global major countries, especially the U.S., China and Russia,” Paksoy noted. The report showed that in 2018, a total of 40 new International Investment Agreements (IIAs) were signed, with Turkey being the most active country in concluding such deals.

Foreign direct investment records 6.3% rise in first half

oreign direct investment (FDI) in Turkey increased by 6.3% from June last year to June 2019, reaching approximately $12.4 billion. According to information compiled by the Economic Policy Research Foundation of Turkey (TEPAV), FDI in Turkey retained almost a horizontal course until the 2000s and caught an upward trend in 2003. Foreign direct investment, which maintained an upward trend last year, saw a 6.3% rise from approximately $11.6 billion in June last year to $12.4 billion in the same period this year. Outgoing investments from Turkey, on the other hand, climbed by 2.4% compared to the same period last year. Qatar and the U.K. took the lead in foreign capital

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investments that came to Turkey in the January-June period. Despite varying amounts, it was seen that while the investments coming from the U.K. were regular, Qatarâ&#x20AC;&#x2122;s investments intensified in June. FDI increased by approximately $188 million in the first half of this year compared to the same period last year, amounting to $3.1 billion. Around 19.4% of this investment came from Qatar, 18.7% from the U.K. and 17.5% from Azerbaijan. Compared to last year, the share of the top three countries in total investments increased from 34.3% to 55.6%. In the period covering 2002-2019, 15.8% of the approximately $157.9 billion invested by foreign residents came from the Netherlands, 7.6% from the U.S., 6.9% from the U.K., 6.7% from Austria and 6.2% from Germany. In terms of sectors, around 61.9% of the investments went to services, 37.7% to industry and 0.4% in agriculture. In June, Turkeyâ&#x20AC;&#x2122;s overseas investments also concentrated in the finance and insurance activities sector.

Approximately $94 million of the $414 million worth of the total overseas investments were realized in this sector. While 85% of these investments went to European countries, the Netherlands attracted $214 million in this period. In the January-June period, overseas investments decreased by $373 million to $2 billion compared to the same period of the previous year. Considering the distribution of the overseas direct investments in this period, the Netherlands, the U.S., Germany and Switzerland were among the primary destinations. During this period, 48.4% of this amount was made in the Netherlands, 13% in the U.S., 8.6% in Germany and 6.6% in Switzerland. Looking at the distribution of overseas investments by sectors in the period of 2002-2019, it was seen that 54.2% of the $45.9 billion was realized in industry, 45.4% in services and 0.4% in agriculture. In this period, 29.5% of the $45.9 billion in overseas investments went to the Netherlands, 14.3% to Azerbaijan

Focus 2019: The Heavy Duty And Heavy Goods Vehicle After Sales Market At Equip Auto

As the second largest market represented by EQUIP AUTO visitors after light vehicles (personal and commercial vehicles), heavy duty vehicle and HGV maintenance and repair will be specifically spotlighted in 2019. While the profile of the visitors concerned differs to that of personal vehicle repair businesses, supply-side players are by and large the same companies, beginning with OEMs and distribution networks.

he heavy-duty vehicle sector, just like the LCV or personal vehicle sectors, is undergoing a period of profound transformation, whether technological, regulatory or relating to vehicle use. Transformations relating to the digital revolution (from vehicle

part of vehicle manufacturer networks, independent networks or in-house HGV or LV fleet workshops. Nonetheless, heavy-duty vehicle aftersales also has its own specific issues. Reducing maintenance costs, reducing vehicle downtime, technician training are

EQUIP AUTO NOT ONLY REASSERTS ITS HISTORICAL MISSION ON THIS MARKET, BUT ALSO OFFERS ALL PROFESSIONALS A GLOBAL VISION OF AFTERSALES AND SERVICES FOR MOBILITY FOR ALL VEHICLES. manufacture to maintenance, but also parts and components distribution channels and workshops) affect the HGV market as much as the light vehicle (LV) market. These apply to fleet managers and aftersales professionals, whether

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all challenges for managers and operators of HGV fleets, as well as for suppliers of parts and components, workshop equipment and machinery and specialist service providers.The growing proportion of Euro V and VI

vehicles on the road, reducing the fleetâ&#x20AC;&#x2122;s average age, complicates the task for independent networks in their battle with vehicle manufacturer networks, who are just as comfortable with multibrand fleets as independent networks should be by nature. According to observers, between 2010 and 2017, the 5 to 9-year-old motor vehicle segment in the overall vehicle fleet dropped by 19%, and according to GIPA, the replacement of older tractor units has deeply modified the vehicle fleet, which now has an average age of 6.5 years. Vehicle manufacturers and independent firms faced with customer acquisition and retention challenges deploy often similar commercial strategies, with for example, the deployment of service contracts.

Russia, Turkey to increase trade in local currencies

urkey and Russia signed an agreement to increase the use of local currencies -- Turkish Lira and Russian Ruble -- in bilateral trade, the Russian Finance Ministry announced on Oct. 8. Turkish Finance and Treasury Minister Berat Albayrak and his Russian counterpart Anton Siluanov signed the agreement. Within the scope of the agreement, commercial institutions’ demand for two currencies will be raised and a proper finance structure will be established. The agreement will also enhance the use of Russia’s National Payment Card (MIR) and Financial messaging system of the Bank of Russia (SPFS), which is an alternative of the Society for Worldwide Interbank Financial Telecommunication (SWIFT) -- in Turkey. Parties will also develop debt securities for Russian and Turkish exporters. The agreement is a significant step for increasing fair trade and economic cooperation between two countries, according to the announcement. Two countries’ bilateral trade totaled $25.4 billion last year, with Russia dominated it by making nearly $22 billion export to Turkey.

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Turkish auto market aims over $32 billion exports in 2019

urkish auto market aims over $32 billion exports in 2019 Turkey’s automotive industry exports will exceed $32 billion in 2019, head of Uludağ Automotive Industry Exporters’ Association (OİB) said. “As the automotive industry, we are

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aiming to overcome all difficulties and to close this year with an increase in exports. In this direction, we set our export target in 2019 to be $32 billion,” Baran Çelik, the chief executive officer of OİB, said in a statement. Çelik said that Turkish automotive

sector’s exports reached $31.6 billion in 2018 with an increase of 11 percent compared to 2017, noting that Turkey left behind another year full of records. “Last year, we achieved an export average of $2.63 billion on a monthly basis,” he added.

Ford Trucks enters Western European market

fter receiving the 2019 International Truck of the Year (ITOY) award for the F-MAX, an important indicator of the point that Ford Otosan has reached in truck production power and engineering capability, Ford Trucks has been in the spotlight in the world, according to Ford Otosanâ&#x20AC;&#x2122;s statement. Having improved its dealership and distributorship

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structure in the Middle East, Africa, Central and Eastern Europe so far, Ford Trucks has entered a new phase with the ITOY award. The truck maker has revised its global growth plans and rescheduled its process of establishing a dealer network in Western Europe to an earlier time. Ford Trucks, which has achieved global growth as a Turkey-

based brand, aims to expand its dealership and distributorship activities to 44 countries by the end of the year and to have a presence in at least 80 countries by the end of 2023. Ford Trucks opened its first facilities in the region in Portugal and Spain. These two markets, which will make significant contributions to Ford Trucks in terms of increasing its

power in global competition as well as enabling the company to step into the Western market, are the gateways of Europe opening up to Africa. Spain and Portugal are also a logistics base with their major ports in the Mediterranean and Atlantic Ocean and among the countries with the deepest-rooted automotive industry. Ford Trucks, which opened its first plant in Portugal through cooperation with Oneshop in Lisbon, plans to complete its construction in the other important cities of Porto, Leira, Algarve and Viseu by 2021. In Spain, Ford Trucks joins hands with F-Trucks Automotive Hispania, which has nearly 25 years of experience in the automotive industry. F-Trucks Automotive Hispania’s nine separate locations in Spain’s leading cities of Madrid, Barcelona, La Coruna, Bilbao, Seville and Zaragoza will serve as Ford Trucks facilities as of now. Ford Otosan General Manager Haydar Yenigün stated that they are pleased that Ford has reached a groundbreaking position in the heavy commercial vehicle industry with its vehicles produced in Turkey, which is a product development center in the world. He pointed out that F-MAX is having an accelerating impact on the truck maker’s global growth plans and that they have established a dealership and distributorship network on the three continents of Asia, Europe and Africa, saying: “We expect that we will operate in 44 countries by the end of 2019. Following the intense interest F-MAX has attracted, we have revised our global growth plans and taken our goal one step further to have a presence in more than 80 countries by the end of 2023.” “We have also seen the expectation of distributor companies and leading fleets in Western Europe to have F-MAX as soon as possible. After we received some 70 demands for dealerships and distributorships, we rescheduled our process of structuring in the region to an earlier time. We agreed with our first distributors on Spain and Portugal, where we have made rapid progress in talks and which have strong heavy commercial vehicle markets, and

opened our facilities for service,” he said. 50% of exports to Europe Yenigün stated that Europe is the main export market and has great importance in the company’s growth strategy with its potential, adding that their goal is to reach 50% of exports to European markets. Indicating that F-MAX will be the driving force for them to achieve this export goal, Yenigün said they expect F-MAXs will constitute 70% of their truck sales to Europe. “Once our dealership and distributorship structure in Europe is completed, we expect that this rate will increase to 80%. In this context, we are continuing our negotiations to have presence in other countries in Western Europe. We are expecting that our structuring in Italy will be completed this year. Our primary target markets will then be Germany, France, the Netherlands, Belgium and Luxembourg. Our ultimate goal with our Ford Trucks brand is to spread all over Europe,” he told. Emphasizing that progress in the

European market would contribute greatly to Ford Trucks’ global growth, Yenigün stated that Western Europe alone would produce a potential market as big as the total countries Ford Trucks already operates in. Highlighting that they design, develop and produce their products with their own internal resources and without being dependent on others, Yenigün noted that domestic transmission production, which they launched in 2018 with an investment of 49.5 million euros ($54.41 million), was an important step in this regard. “We will soon start producing transmissions in our Eskişehir facility and will be one of the few global truck manufacturers in developing and manufacturing three important product groups of engines, axles and transmissions by 2021. We are increasing our domestic and competitive power through investments in our testing and production centers, as well as in our products,” Yenigün concluded.