Automotive Exports September 2023

1

Monthly automotive aftermarket magazine
GROUP CHAIRMAN
H. FERRUH ISIK
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Ready to upgrade the automotive exports
As known, the autoparts industry of Türkiye has developed rapidly in line with the
automotive industry. The Turkish autoparts industry with its large capacity, wide variety of
production and high standards, supports automotive industry production and the vehicles
in Türkiye and also has ample potential for additional exports.
Whereas previous manufacturing activity focused on domestic markets only, production
now extends to export markets. As a result of this structural change, the competitiveness
at the domestic level is now replaced with competitiveness on a global scale, both in
terms manufacturers and suppliers. Fluctuations in production resulting from global
economic crises have given way to stable production patterns. In addition, the consumer
satisfaction standard based on domestic market demands has now become a quality
standard satisfying customers worldwide.
Following the shift of the focus on customers, markets, products and competition from
the local level to the global level, Turkish manufacturers and suppliers now position
themselves globally rather than locally.
This transformation in the sector urges automotive suppliers to improve their existing
structures in line with the demands of global auto manufacturers. These improvements
relate to a need to build advanced technological skills, infrastructure, research and
development means; capable of effective and successful technical cooperation; skilled in
unique product development; equipped with the ability to obtain shares in global projects
as well as to have high brand competitiveness.
Actually, auto manufacturers increasingly choose Türkiye as a production base for their
export sales. This is evidenced by the fact that 73 percent of vehicle production in Türkiye
was destined for international markets in 2022. Türkiye exported more than 950,000
vehicles to international markets in the same year.
We think that technology and competitive power will always be the two keys for the
survival of the automotive industry. Dynamism and innovation have turned out to be the
rules of the game in the automotive industry as usual.
This month, we participate in Equip Auto Lyon, 2023 to convey the messages of the
Turkish automotive and autoparts industrialists.
Our publications remain at the service of those business people seeking to increase their
share in the increasingly competitive automotive market. They are ready to upgrade their
export volume further.
We wish them and their trading partners a fruitful business
automotiveexport
automotiveexports

Equip Auto Lyon, 2023 Heralds New Horizons
Considered to be the headline event in
2023 by the automotive aftersales and
connected mobility services markets, this
first Lyon edition has received the strong
support of great numbers of professionals.
To illustrate their loyalty and dedication,
the show’s organisers and the exhibitors
themselves have planned an array of
exclusive highlights and special features,
reflecting the tradeshow’s aim of fostering
exchange by combining business and
conviviality.
With five theme villages, three major
forums, ten panel discussions, an exclusive
display on the history of tyres: “The
tyre has a history, the tyre has a future”
in partnership with the French Tyre
Association, and an unprecedented car
wrapping feature, EQUIP AUTO Lyon has
lined up an exciting and comprehensive
programme of content.
Among these special events, the
prominent car wrapping expert Morgane
Quetier from the RMC Découverte TV
show “Les reines de la mécanique”
will be in Lyon for the full three-day
duration of the show. Here, she will put
on car wrapping demonstrations in the
exhibition’s Bodywork sector, providing
visitors with the opportunity to try their
hand and test their skills.
Meanwhile, with a focus on fun and
relaxation, exhibitors and their guests will
have the chance to chat, be entertained
and take part in the various games and
features on offer at the EQUIP AUTO
exhibitor party on Friday 29 September:
games and features with a sporting or
culinary theme will laid on at this festive
event!
An outdoor demo zone will also be set up
for the benefit of professionals.
The Association Eco Entretien (ecomaintenance)
will produce live
demonstrations of “5 gaz” audits using
Eco Entretien labelled measuring devices.
The association will also conduct fine
particulate measurements; already in
force in several European countries, these
assessments are intended to combat
pollutant emissions and inform public
debate.
Autosmart, a global manufacturer
and supplier of car care products, will
present its Autosmart franchise concept,
illustrating its intention to stay ever closer
to the market. To promote the power of its
concept Autosmart will present its mobile
shop and product range to the visitors in
attendance.
BMW will offer an exclusive
demonstration of the semi-self-driving
technology of the BMW i7, where the
car moves with astonishing ease and
precision, thus illustrating the permanent
dedication of BMW to innovation and the
future of mobility. BMW will also be on
hand to meet the sector’s professionals
and highlight the career opportunities
offered by the brand as part of its
commitment to training and supporting
talent, notably that of mechanics and
technicians.
FACOM, a manufacturer of hand-held
tools for mechanics professionals with
an over-100-year history, will introduce
its FACOM Demonstration Truck with its
range of tools, its new features and its
innovations. An exceptional surprise event
around the Demo Truck will delight the
fans of tools and the brand.
September 2023 10

Auto sales leap 115 pct in July
A total of 112,459 passenger cars and
light commercial vehicles (LCVs) were sold
in July, marking a robust 115.4 percent
increase from a year ago.
The numbers pointed to the highest ever
July sales.
As availability problems are largely resolved
more cars entered the market, consumers
are anticipating higher car prices in the
coming months that’s why they increased
their purchases of vehicles, people from
the auto industry said, explaining the
strong July sales number.
Passenger car sales grew more than
109 percent year-on-year to nearly
86,000, while the annual increase in light
commercial vehicles was 138 percent, data
from the Automotive Distributors’ and
Mobility Association (ODMD) showed.
The expansion in the passenger car market
slowed from 68.5 percent in May to 40.1
percent in June.
Data from the association showed that
passenger car sales were 79.5 percent
higher than the 10-year average.
Electric vehicle sales rose by a staggering
1,392 percent from July 2022 to 4,013,
which accounted for 4.7 percent of all
vehicle sales. From January to July, a
total of 17,307 EVs were sold on the local
market, marking a 584 percent increase
from the same period of last year. Türkiye’s
indigenous electric carmaker Togg said
it delivered 627 cars to their owners in
July, which brought the number of total
deliveries of its T10X model to 1,435.
“We consolidated our market leader
position in the electric C-SUV segment,” the
company said on Twitter. Hybrid car sales
in the first seven months of 2023 grew at a
slower pace of 63 percent to a little more
than 53,000.
In January-July, total vehicles sales
- including passenger cars and LCVs -
increase by 63.1 percent to 668,828.
The passenger car market expanded at 62
percent as 516,288 cars were sold, LCV
sales were up 68 percent to 152,540.
September 2023 12

Automotive
exports expected
climb to $34
billion this year
The Turkish automotive sector’s export
revenues may climb to $34 billion this year,
according to a report by KPMG.
Last year, the local industry produced 1.3
million vehicles and sales on the local
market amounted to 827,000 while 970,000
vehicles were shipped to foreign markets.
Data from the Automotive Manufacturers’
Association (OSD) showed that export
revenues of Turkish carmakers increased by
5.5 percent last year compared with 2021
to stand at $31.5 billion. The industry’s
exports have exceeded $20 billion in
the first seven months of 2023, rising
16 percent from the same period of last
year, according to the Turkish Exporters’
Assembly (TİM). The automotive sector
accounted for 16 percent of Türkiye’s
total exports in the January-July period.
The KPMG report noted the availability
problems in the auto market due to the
semiconductor shortages, coupled with
the special consumption rates depressed
domestic demand in 2022. However, the
local auto industry appeared to have
overcome this availability problem. In July,
the combined sales of passenger cars and
light commercial vehicles (LCV) leaped
115.4 percent from a year ago. Passenger
car sales grew more than 109 percent to
around 86,000, while LCV sales soared
almost 138 percent to 27,000.
Experts said that carmakers were able to
deliver the orders to their customers, which
partially explained the surge in sales.
Consumers also decided to buy now,
anticipating that the car prices will
increase in the coming months due to the
depreciation of the Turkish Lira, which led
to a sharp rise in vehicle demand in July,
according to experts. Demand has been
strong over the past months also because
people purchased cars as an investment
to protect their savings against inflation.
Those, who cannot buy a house, which is
a favorite investment among Turks, due to
exorbitant property prices, turned to cars,
said experts.
September 2023 16

2024 to mark new records for
Türkiye’s oil production
Türkiye’s state energy company Turkish
Petroleum Corporation (TPAO) is set to
surpass all previous production figures by
the end of this year, setting a new record
and making 2023 a remarkable year for the
company, Energy and Natural Resources
Minister Alparslan Bayraktar said.
The newly appointed minister was speaking
during a field visit to southeastern Şırnak
province, where the country has most
recently discovered oil.
Looking ahead to 2024, Bayraktar
emphasized the significance of that year for
Turkish Petroleum, as it will mark its 70th
anniversary.
He projected that the TPAO would continue
to elevate its production records and aims
to achieve a daily production milestone of
200,000 barrels.
“This feat would effectively meet
approximately 20% of Türkiye’s energy
requirements,” he said.
Stating that Şırnak has become an
important center for Türkiye and the
September 2023 22

world oil markets, Bayraktar said: “Şırnak
is turning into a very important oil center
with the discoveries we have made
recently. It is a recourse to its origin. Şırnak
has always been an important oil center
since the 1970s. The route is one of the
routes through which the Iraq-Türkiye
pipeline passes.”
Referring to PKK terrorism in the region,
he said that regions that were once
synonymous with terrorism, such as Gabar,
Kato and Bestler-Dereler regions, are now
associated with oil.
“This region has become the region
of peace, tranquility and oil. These
regions were cleared of terrorism with
the determined, persistent stance and
struggle of the Republic of Türkiye. All of
our institutions, especially our governors,
local administrators, relevant institutions,
security forces, gendarmerie, police and
military, have made these regions truly
peaceful and livable.”
“Right after that, we continued the
work we started in oil and natural gas
exploration here, and we started to get
results from them,” he said.
Türkiye’s daily output has topped 70,000
barrels, the TPAO said most recently,
adding: “With our discoveries, we have
exceeded the highest domestic daily
production level in the last 32 years.”
Türkiye, in early May, announced it had
discovered 1 billion barrels of oil in a field
in the southeast province of Şırnak, the
largest onshore oil find in the country.
TPAO has drilled 2,771 meters (9,091 feet)
deep and found an over 162-meter light
oil-bearing reservoir, with further prospects
to be explored in the area.
The country discovered 150 million barrels
of oil in the southeast’s Mount Gabar area
in December 2022.
President Recep Tayyip Erdoğan had
dubbed it “one of the top ten onshore
discoveries in 2022” and said it was valued
at approximately $12 billion.
Türkiye, which has little oil and gas, imports
nearly all its energy needs. The country
consumed 246 million barrels of imported
crude oil in 2022, besides 29 million barrels
of locally produced crude oil, according to
official data.
September
2023
24

Hafize Gaye Erkan, Governor of CBRT.
Tightening to
continue until
inflation outlook
improves
The monetary tightening process, which
began with a sharp post-election rate hike,
is expected to continue until a significant
improvement is achieved in the inflation
outlook, Türkiye’s central bank said.
The guidance was given in minutes of the
bank’s June 22 policy meeting, where it
hiked its main interest rate by 650 basis
points to 15%. After a two-year easing cycle,
the Central Bank of the Republic of Türkiye
(CBRT) said the policy reversal was the first
step of a tightening process initiated to
establish disinflation as soon as possible.
“The deterioration in price stability
threatens macroeconomic stability and
especially financial stability. Accordingly,
the committee decided to implement a
monetary tightening process, the steps of
which are gradually strengthened when and
as necessary,” the central bank said.
“The monetary tightening process is
expected to continue until a significant
improvement is achieved in the inflation
outlook,” it said in a Turkish version of
minutes of its monetary policy committee
meeting. The rate hike came in the first
policy meeting under the new Governor,
Hafize Gaye Erkan. Before that, the oneweek
repo rate had dropped to 8.5% from
19% in 2021. Annual inflation fell below 40%
in May after touching a 24-year high above
85% in October last year.
“The committee evaluated that the current
monetary policy framework is far from
achieving the 5% inflation target, given the
inflation outlook and upside risks,” the bank
said.
September 2023 28

France presses
China on
market access,
lobbies for EV
investment
France said it had pressed Chinese
leaders to open their markets wider
to foreign companies and lobbied for
electric car investment, as the European
Union’s second-largest economy followed
Washington in reviving post-COVID
economic talks amid tension over Beijing’s
surging trade surpluses.
French Finance Minister Bruno Le Maire
also defended Paris’s controls on foreign
access to technology after authorities
said two Chinese citizens are under
investigation for what news reports say
is possible smuggling of French-made
processor chips with military uses to China
and Russia.
Le Maire met with Vice Premier He Lifeng,
Beijing’s top envoy on economic issues. He
followed Treasury Secretary Janet Yellen,
who visited Beijing on July 9-10 as part of
U.S. efforts to revive frosty relations with
China.
Chinese officials gave Le Maire and Yellen
a warm welcome as part of efforts to
reverse an economic slump by reviving
foreign investor interest. But Beijing has
given no indication of possible changes
in technology and other policies that
its trading partners say violate Chinese
market-opening commitments.
Officials of the 27-nation European Union
are trying to narrow a trade deficit with
China that swelled to 396 billion euros
($432 billion) last year. Le Maire cited
cosmetics, aerospace and agriculture as
possible areas for more French exports.
“There is a need to improve access to the
Chinese market. I think it was at the core
of our discussions,” Le Maire said in an
interview at the French Embassy. “We want
to have a stronger economic relationship
between Europe and China, between
France and China, which means to get
access for all European goods.”
Chinese leader Xi Jinping’s government has
looked to Europe as an alternative market
and source of technology since Washington
tightened controls on access to U.S.
processor chips and other high-tech goods
and hiked tariffs on imports from China
in a feud over its industry development
ambitions.
Le Maire and Chinese officials pledged to
cooperate on climate change, financing for
developing countries and nuclear power.
They announced plans to set up a group
to settle a dispute over access to China’s
market for cosmetics, a major French
export.
Le Maire also lobbied for investment from
China’s fast-growing electric car industry.
He was due to fly to the southern city of
Shenzhen to meet Wang Chuanfu, founder
of BYD Auto, one of the world’s biggest
electric vehicle (EV) producers. BYD Auto
and other Chinese brands are starting to
sell in developed markets including Europe
and Japan. Chinese battery supplier CATL
has set up a factory in Germany to supply
automaker BMW.
“We want China to make investments
in France in electric vehicles,” Le Maire
said. “In the climate transition, there is a
place for Chinese investment in France,
which allows us to reinforce our economic
relations and also speed up action against
global warming.”
The talks were overshadowed by Russia’s
war against Ukraine and complaints
China might be helping Moscow evade
Western sanctions, but Le Maire said
he didn’t discuss the war with Chinese
officials. However, he said it was in Beijing’s
interest to end the 17-month-old war.
President Emmanuel Macron’s security
adviser, Emmanuel Bonne, said China was
delivering “military equipment” to Russia
but gave no details.
“I want to make very clear that we want
this war to go to an end as soon as
possible,” Le Maire said. “Indeed, (it is) in
the interest of China, it is in the interests of
the global growth to have peace as soon as
possible.”
Le Maire also defended French controls on
technology exports and foreign investment
in the high-tech industry. French
authorities are investigating two Chinese
citizens associated with chip producer
Ommic who the newspaper Le Parisien said
face possible charges of exporting chips to
a Chinese armaments maker using forged
documents.
French counter-espionage officials believe
a Chinese investor who bought control
of Ommic in 2018 was trying to transfer
chip manufacturing technology to China,
according to the newspaper. The ruling
Communist Party is trying to develop its
own chip industry, but Washington has
blocked access to advanced manufacturing
tools and persuaded allies Japan and
the Netherlands to impose their own
restrictions.
Chinese authorities complain their
companies are unfairly targeted by
restrictions on access to foreign technology.
They have warned curbs on access to
semiconductors will disrupt smartphones
and other industries.
“Everybody can understand that France
wants to protect its key technologies,” Le
Maire said. “We don’t want any foreign
country to get access to those French
sovereign technologies.”
September 2023 30

Togg delivers more than 2,000 cars
The number of Togg vehicles on Türkiye’s roads has exceeded
2,000, Technology and Industry Minister Mehmet Fatih Kacır has
said. Türkiye’s first indigenous electric carmaker delivered more
cars in the first half of August than it did in the whole of July, Kacır
wrote on social media platform X, formerly known as Twitter.
“The production [of Togg cars] will accelerate. The target is to
manufacture a total of 28,000 Togg T10X model vehicles by the end
of the year,” the minister said.
Kacır, together with Treasury and Finance Minister Mehmet Şimşek,
visited the carmaker’s production and innovation campus on Aug. 17.
“The target is to become a global power,” Kacır wrote on X.
Between Aug. 1 and 18, Togg delivered a total of 909 T10X model
cars to customers, while July deliveries were 627.
Until mid-Aug, the company delivered 2,344 vehicles.
Pre-orders for the Togg T10X were taken online from March 16 to
27, and some 177,000 vehicles were sold online. The first buyers of
Togg’s EV model T10 were selected through a digital draw.
In his remarks in July, Kacır said that Togg will produce a total of 1
million vehicles by 2032.
Some 97 percent of those vehicles will be sold to consumers,
while the public institutions will buy the remaining 3 percent, the
minister said at that time.
Kacır also announced that Togg will introduce a new Sedan model
to the market toward the end of 2024.
Türkiye’s electric vehicle market has been growing fast.
In the first seven months of 2023, electric vehicle sales leaped
nearly 584 percent from a year ago to 17,307, accounting for 3.4
percent of all vehicle sales in the country.
September 2023 32

Teknofest competition turns projects
into innovative initiatives
The world’s largest aviation, space,
and technology festival, Teknofest,
continues to captivate audiences with its
groundbreaking achievements.
Following its record-breaking success in
Istanbul, which attracted 2.5 million visitors
in April, Teknofest is set to make its mark in
the capital Ankara on Oct. 1, 2023, before
heading to the western province of Izmir.
The festival, known for celebrating science,
technology and space exploration, is
now evolving into a platform that fosters
an entrepreneurial spirit and drives
innovation, aiming to transform projects
into viable startups.
Teknofest’s mission is to unite millions of
individuals under the vision of a “National
Technology Move” to achieve complete
technological independence for Türkiye.
In pursuit of this vision, the festival will
witness the development of projects in 10
distinct categories that have the potential
to evolve into entrepreneurial ventures.
These categories include Education
Technologies, Health and Wellness
Technologies, Transportation and Mobility
Technologies, Agricultural Technologies,
Communication and Communication
Technologies, Tourism Technologies,
Environment, Energy and Climate
Technologies, Space, Aviation and Defense
Technologies, Disaster Management
Technologies and Barrier-Free Living
Technologies.
The Teknofest Enterprise competition
invites high school, university and
advanced-level teams that have
participated in previous competitions
held between 2018 and 2023 to showcase
their innovative ideas. Divided into two
phases, Pre-Incubation and Acceleration,
the competition aims to support both
startups in early stages and teams that
have progressed to product development
and company
establishment.
In the Pre-
Incubation
category, teams
with startup
ideas or those
currently
developing
their products
will be
evaluated.
The primary requirement at this stage is
the demonstration of progress without a
specific need for venture establishment or
incorporation. Moving to the Acceleration
phase, teams that have successfully
transformed their projects into tangible
products and established companies
associated with these ventures will present
their innovations for evaluation.
Teknofest, with its commitment
to integrating participants into the
entrepreneurial ecosystem, strives
to facilitate the commercialization of
technology competition projects and
their subsequent impact on society. In
recognition of the potential of these
projects to fuel the National Technology
Move and transform into successful
startups, a generous prize pool of over TL
7 million ($268,901) will be awarded to
deserving participants.
September 2023 34

Europe’s electric car market share
overtakes diesel in June
The sales of new electric battery vehicles
overtook diesel car purchases in Europe for
the first time, but activity is far from prepandemic
levels, a lobby group said.
In June, the market share for cars running
on electric batteries rose to 15.1%,
according to the European Automobile
Manufacturers’ Association (ACEA), with
over 158,000 units sold in the EU.
Most EU markets recorded double or
even triple-digit percentage gains, with
heavyweights Germany, France and the
Netherlands all posting increases of over
50%. Petrol remained the new car fuel type
with the largest market share at 36.3%,
while hybrid electric vehicles were second
at 24.3%. Automakers and consumers
are looking to steer away from vehicles
running on polluting fossil fuels to reduce
greenhouse gas emissions and fight climate
change.
A searing heatwave that has engulfed large
parts of Europe has reinforced concerns
about the impact of global warming on
the planet. The ACEA said new EU car
registrations in the first six months of
2023 increased by 17.9%, with 5.4 million
new units. But it noted that cumulative
volumes for the period were 21% lower
than in 2019, the final full year before the
coronavirus pandemic, which upended
the industry and the global economy.
Lockdowns and restrictions on daily
life decimated economic activity, while
the reopening of economies saw the
industry challenged by disrupted supply
chains and inflation. A 17.8% growth
of the car market in the EU in June was
due to a low comparison base last year,
“primarily driven by vehicle component
shortages,” said the ACEA. However, “the
recent improvements indicate that the
European automotive industry is recovering
from supply disruptions caused by the
pandemic,” it added.
September 2023 36

Türkiye logs larger-than-expected
current account surplus in June
Türkiye’s current account in June registered
a surplus for the first time in almost two
years, official data showed, driven partly by
robust tourism and lower energy bills.
The balance registered a surplus of $674
million (TL 18.23 billion), swinging from
a $7.84 billion deficit in May, the Central
Bank of the Republic of Türkiye (CBRT) said.
It marked the first surplus since October
2021. The figure came in larger than
expected by market surveys. A forecast in
a Reuters poll was for a surplus of around
$426 million. An Anadolu Agency (AA)
survey forecasted a surplus of $422 million.
Excluding gold and energy, the two main
drivers of the deficit so far, the balance
registered a net surplus of $5.58 billion in
June, the central bank data showed.
The trade gap came in at $3.69 billion,
while the services industry posted a net
surplus of $5.02 billion. Travel items, under
services, recorded a net inflow of $4.2
billion.
Primary income recorded a net outflow of
$799 million, whereas secondary income
indicated a net inflow of $151 million, the
bank said. In June, direct investments saw a
net inflow of $135 million.
The balance was expected to improve
on seasonal factors, including a lower
energy import bill, high tourism income
and monetary tightening that started after
the May elections. President Recep Tayyip
Erdoğan’s government has orchestrated a
U-turn away from policies based on interest
rate cuts that had been accompanied by
a steep fall in the Turkish lira and soaring
inflation. Since June, the country’s central
bank has reversed and hiked its policy rate
by 900 basis points to address inflation,
which leaped to a 25-year high above 85%
last year but subsequently eased to as low
as 38.21% in June. It rose again to nearly
48% due to the lira’s decline and various
tax hikes and officials have acknowledged
it would rise further toward the year-end.
CBRT Governor Hafize Gaye Erkan said the
impact of the monetary tightening cycle
would result in an improvement in the
current account in the second half of 2023.
In 2022, Türkiye’s current account deficit
was at nearly $48.77 billion.
September 2023 38

Türkiye’s automotive industry growing dynamically
The foundation of Türkiye’s automotive
industry dates back to the early 1960s.
During a period of rapid industrialization
and progress, this key sector transformed
itself from assembly-based partnerships
to a full-fledged industry with design
capability and massive production
capacity. Since 2003, original equipment
manufacturers (OEM) have invested
over USD 17 billion in their operations in
Türkiye. These investments significantly
expanded their manufacturing capabilities,
which in turn led Türkiye to become an
important part of the global value chain
of international OEMs. Meeting and
exceeding international quality and safety
standards, today’s Turkish automotive
industry is highly efficient and competitive
thanks to value-added production.
As part of its commitment to transforming
its automotive industry, which has
historically been a key economic driver
in integrating the Turkish economy with
the global value chain, and to its vision of
making Türkiye an economic powerhouse,
Türkiye has introduced its own locallydeveloped
born-electric car built upon
strength stemming from the country’s longstanding
know-how in the area.
Accordingly, Türkiye’s Automobile Joint
Venture Group, known as Togg, will
produce five different models on a joint
platform with fully-owned intellectual and
industrial property rights by 2030.
Leveraging a competitive and highly-skilled
workforce combined with a dynamic
local market and favorable geographical
location, the vehicle production of 8 global
OEMs in Türkiye has increased by almost
five times from 300,000s in 2002 to over
1.3 million units in 2022. This represents a
compound annual growth rate (CAGR) of
around 6 percent during that period.
• Significant growth posted by Türkiye’s
automotive sector led to the country’s
becoming the 13th largest automotive
manufacturer in the world and 4th largest
in Europe by the end of 2022.
•Türkiye has already become a center of
excellence, particularly with respect to the
production of commercial vehicles. By the
end of 2022, Türkiye was the number one
producer of commercial vehicles (CVs) in
Europe.
• Proven as a production hub of excellence,
the Turkish automotive industry is now
aiming at improving its R&D, design, and
branding capabilities. As of 2022, 156
R&D and design centers belonging to
automotive manufacturers and suppliers
are operational in Türkiye.
• Notable examples of global brands
with product development, design,
and engineering activities in Türkiye
include Ford, Fiat, Daimler, AVL, and
FEV. Ford Otosan’s R&D center is one of
Ford’s three largest global R&D centers,
while Fiat’s R&D center in Bursa is the
Italian company’s only center serving
the European market outside its home
country. Meanwhile, Daimler’s R&D center
in Istanbul complements the German
company’s truck and bus manufacturing
operations in Türkiye. AVL Türkiye, which
opened up its 2nd R&D center in Türkiye,
develops autonomous and hybrid vehicle
technologies.
• Türkiye offers a supportive environment
on the supply chain side. There are around
1,100 component suppliers supporting the
production of OEMs. With the parts going
directly to the production lines of vehicle
manufacturers, the localization rate of
OEMs varies between 50 and 70 percent.
•Türkiye is home to many global suppliers.
There are more than 250 global suppliers
that use Türkiye as a production base, with
30 of them ranking among the 50 largest
global suppliers.
• Auto manufacturers increasingly choose
Türkiye as a production base for their export
sales. This is evidenced by the fact that 73
percent of vehicle production in Türkiye
was destined for international markets in
2022. Türkiye exported more than 950,000
vehicles to international markets in the
same year. In addition, Türkiye has been the
number one vehicle exporter to European
markets for around a decade.
September 2023 40

Exporters confident $265 bln target within reach
Encouraged by the steps the new economic
team has taken over the past two and a half
months, Türkiye’s exporters have voiced
optimism that the target of generating $265
billion in export revenues appears to be
within reach.
The increase in the foreign exchange rates,
albeit limited, came as a relief to exporters,
said Mustafa Gültepe, the president of the
Turkish Exporters’ Assembly (TİM), noting
that the rates had remained flat for a long
period of time.
Gültepe noted that there have been positive
developments in exporters’ access to
financing.
The daily limit for rediscount credits was
raised to 1.5 billion Turkish Liras, while the
small and medium-sized enterprises’ (SMEs)
share in rediscount loans was increased,
Gültepe said.
“We welcome the Central Bank’s decision
that export loans will be exempt from
credit restring measures…We see all those
measures as important steps taken toward
helping to reach the export targets.”
They expect monetary tightening policies to
remain in place for some more time in the
U.S. and Europe, Gültepe said.
“However, we also anticipate that the
economic activity will recover in those
regions in the final quarter of the year. The
recovery in our main export markets will
boost our exports.”
Gültepe recalled that Türkiye has set a
target of generating $265 billion in export
revenues this year.
“We will make all the efforts in the
remaining five months of the year and meet
this target,” he said, adding that despite the
February earthquakes and the stagnation
in export markets, the Turkish economy is
continuing to grow.
The textile and apparel industries are key
exporting sectors, Gültepe noted.
The two sectors collectively generate
around $32 billion in export revenues,
according to Gültepe. “We set mediumterm
export targets of $40 billion and $20
billion for the apparel and textile industries,
respectively. With our brands and the skilled
workforce, we have the potential to achieve
this target.” Türkiye’s exports amounted
to $143 billion in the first seven months of
2023, declining slightly from $144 billion
in export revenues generated in the same
period of last year. In June alone, exports
grew by 8.4 percent year-on-year to $20
billion, with the automotive, chemicals and
textile sectors accounting for $2.7 billion,
$2.1 billion and $16 billion, respectively, of
all export revenues. From January to July,
the country’s imports rose by 5.1 percent
annually to hit $217 billion. The foreign
trade deficit widened 18.2 percent yearon-year
to $73.6 billion in the first seven
months of 2023.
September 2023 42

China calls
West’s economic
de-risking ‘false
proposition’
Chinese Premier Li Qiang slammed efforts
in the West to “de-risk” their economies as
a “false proposition”, hitting back against
U.S. and EU policy aimed at reducing their
reliance on China.
The United States and the European Union
have in recent months moved to “de-risk”
from the world’s second-largest economy.
“In the West, some people are hyping up
what is called ‘cutting reliance and derisking’,”
Li told delegates at the opening
of a World Economic Forum meeting in
northern China.
“These two concepts... are a false
proposition, because the development of
economic globalisation is such that the
world economy has become a common
entity in which you and I are both
intermingled,” he said.
“The economies of many countries are
blended with each other, rely on each
other, make accomplishments because of
one another, and develop together,” he
added.
“This is actually a good thing, not a bad
thing.”
Meeting of the World Economic Forum in
the port city of Tianjin - known colloquially
as the “Summer Davos” - is the first of
its kind after a three-year hiatus caused
by the Covid pandemic. It will last until
tommorow.
European Commission President Ursula von
der Leyen in January described the EU’s
approach to China as “de-risking rather
than decoupling” since the bloc still sought
to work and trade with Beijing.
And President Joe Biden has kept former
leader Donald Trump’s hard line on
China, and in some areas gone further,
including banning exports of high-end
semiconductors to the rising power.
Responding to Beijing’s heated criticism
of the move, Secretary of State Antony
Blinken in Beijing insisted that the
United States was not seeking “economic
containment” of China.
“But at the same time,” he said, “it’s not in
our interest to provide technology to China
that could be used against us.”
Five percent growth
China is on course to achieve its five
percent target for economic growth in 2023
set by Beijing earlier this year, Li also told
the audience at the forum, which is being
attended by leaders from New Zealand,
Mongolia, Vietnam and Barbados, as well
as a large delegation from Saudi Arabia.
“For the whole year, we are expected to
achieve the target of about five percent
economic growth set at the beginning of
this year,” Li said.
“We are fully confident and capable of
pushing ahead the steady and long-term
development of China’s economy on the
track of high-quality development in the
relative long term.”
China is grappling with a slowing post-
Covid recovery, with a number of lacklustre
indicators signalling the rebound is running
out of steam. Beijing’s central bank cut two
key interest rates in a bid to counter the
slowdown in the world’s second-largest
economy.
September 2023 44

EVE Energy announces to bring its flagship power
cell solutions to IAA Mobility 2023, marking its 5th
anniversary of the first international cell order
EVE Energy, a leading global lithium-ion
battery manufacturer in its fifth year of its
first international power battery order, will
make its IAA Mobility debut in September.
At the IAA Mobility 2023 exhibition,
EVE Energy will showcase its power cell
solutions for passenger vehicles that build
on cylindrical and prismatic technical
routes. The Company will show the entire
life chain of cylindrical products, from raw
materials to cells, systems, and battery
recycling, while presenting high- and lowvoltage
prismatic products.
Over the past decade, EVE Energy has
achieved remarkable success in expanding
its international power cell business,
signing and delivering over millions worth
of orders. Lexy Liu, the GM of International
OEM Department at EVE Energy,
recently marked the occasion by sharing
insights into the company’s outstanding
performance, emphasizing the spirit of
continuous learning, teamwork, and a cando
attitude.
Lexy, who has played a pivotal role in
the company’s international business
development, attributes its success to a
strong team spirit. “Teamwork is crucial in
achieving our goals,” Lexy said. “We work
together, learn from our customers and our
colleagues, and leverage our personal and
corporate experiences to drive continuous
improvement.”
Lexy acknowledged that every project
required meticulous planning and
coordination among various teams within
the company. The collaboration between
sales and project teams was essential to
provide comprehensive solutions and
secure contracts. To further enhance
its international business, EVE Energy
established the International OEM
Department in December 2021.
Looking ahead, EVE Energy is focused on
growing its global reach and deepening
relationships with current customers while
exploring new opportunities in emerging
markets. With its advanced technology
and expertise, EVE Energy is committed to
contributing to sustainable transportation
and providing dependable energy storage
solutions worldwide.
Lexy ‘s personal career and academic
background played an instrumental role
in her professional development and
have contributed to the success of EVE
Energy. She holds a bachelor’s degree in
Printing Technology from Xi’an University
of Technology and completed a two-year
exchange program with Stuttgart Media
University. This experience instilled in her a
solid foundation covering German language
and culture, as well as exposure to multiple
renowned automotive manufacturers
headquartered in Stuttgart. Lexy further
pursued her studies in Germany,
specializing in printed electronic products,
including keyboards, audio systems, and
solar cells. Her involvement in battery,
coating, and sales-related projects enabled
her to gain valuable insights into the
lithium-ion battery industry.
While Lexy was doing her master’s degree
at TU Chemnitz, she also worked as an
assistant researcher at Laser Zentrum
Hannover. This experience brought her
a desire for stability in her life. Once she
achieved that stability, she felt a yearning
for new challenges. That’s when she
decided to join EVE Energy. With her sales
expertise and fluency in German, she was
confident that she could help the company
expand its international business.
Transitioning from a research background
to a sales role at EVE Energy, Lexy found
great satisfaction in sharing her ideas and
perspectives with customers. Her previous
experience in product development and
interaction with customers as a product
manager prepared her well for this role.
Lexy mentioned, “I frequently meet with
customers and engage in discussions that
transitioned from technical solutions
to commercial proposals. Although
the content may differ, the essence
of closing deals remains the same. It
involves understanding customer needs
and delivering projects that meet their
requirements.”
Looking back on the success of the
International OEM Department at EVE
Energy, Lexy expressed her sincere
gratitude for the team’s unwavering
commitment and the company’s impressive
expansion. She emphasized the initial
obstacles the team encountered while
entering the global market, underscoring
the crucial role of a cohesive team effort.
EVE Energy’s overall business development
strategy goal is to gain 10% of the
market share, and the international OEM
department in Europe also holds the
same expectation. On May 9 and May 12,
the Company officially announced the
construction of green battery factories in
Hungary and Malaysia, showing confidence
on its upcoming international projects.
In the journey towards internationalization,
EVE Energy has always excelled in
cooperation and excellence, showcasing
its top-notch manufacturing and research
capabilities through the concept of “Quality
First.” The Company has consistently
pursued sustainable development, creating
value for customers and society, earning
recognition from leading domestic and
international enterprises in multiple
segments, receiving perfect ratings from
customers, and establishing long-term and
stable strategic partnerships.
In the future, EVE Energy will continue
to provide customers with higher-quality
products and services, striving to become
the most innovative leader in the lithium
battery industry, and making outstanding
contributions to global sustainable
development.
September 2023 46

Foreign trade deficit down 34.5 percent
Türkiye’s foreign trade deficit has dropped
by 34.5 percent in June, according to data
announced on July 3 by the Trade Ministry.
“This figure is higher than the average
monthly exports in the first five months
of 2023. Exports of $20.9 billion in June
2023 represents a decrease of 10.5
percent compared to June 2022. Thus,
our six-month exports in the first half
of 2023 amounted to $123.4 billion,”
it added.According to data, Türkiye’s
imports fell 16.8 percent to $26.3 billion
in June 2023, the lowest level in 20
months.
“The decline in imports was mainly due
to a decrease in non-calendar energy
imports, and total energy imports fell by
45.3 percent to $4.4 billion in June,” said
the ministry. The fall in imports helped
lower the foreign trade deficit. “With the
realization of our exports at the level of
$21 billion and the noticeable decrease
in imports, Türkiye’s foreign trade deficit
decreased by 34.5 percent to $5.4 billion,”
said the Trade Ministry in its statement.
“The ratio of exports to imports was 79.5
percent in June 2023, with an increase
of 16.1 points compared to the previous
month, approaching 80 percent after 19
months, and was an important indicator
of the positive trend in the foreign trade
balance,” it added. According to official data,
Türkiye’s exports in the first half of the year
were $52 billion to the EU-27, $10 billion
to Africa, $10.6 billion to the Americas and
$20.7 billion to the Middle East.
September 2023 48

Crisis hits China’s auto sector as
EV price war takes toll on workers
When Shanghai suffered a heat wave in
June, the car factory where Mike Chen
worked transitioned its production to the
night shifts and reduced air conditioning.
For Chen, toiling through the early hours
in his sweat-soaked uniform was the latest
slap in the face after cuts in bonuses and
overtime slashed his monthly pay this
year to little more than a third of what he
earned when he was hired in 2016.
Chen, 32, who works for a joint venture
between China’s state-owned car giant
SAIC and Germany’s Volkswagen, is far
from alone. Millions of auto workers and
suppliers in China are feeling the heat as an
electric vehicle price war forces carmakers
to shave costs anywhere they can.
“SAIC-VW used to be the best employer
and I felt honored to work here,” said Chen.
“Now I just feel angry and sad.”
The price war triggered by Tesla has sucked
in more than 40 brands, shifted demand
away from older models and forced some
automakers to curb production of both
EVs and combustion-engine cars or shut
factories altogether.
Reuters interviews with 10 executives of
carmakers and auto parts suppliers, as
well as seven factory workers, point to a
broader industry in distress, with pennypinching
on everything from components
to electricity bills to wages – which is, in
turn, hitting spending elsewhere in the
economy.
Asked about the SAIC-VW plant where
Chen works, which makes combustionengine
cars, VW said pay at joint ventures
varied based on working hours and
bonuses. It said making cars at night
eased the burden on power grids and that
healthy, good working conditions were a
high priority. SAIC did not respond.
Economists warn that China’s auto sector
could even become a drag on economic
growth because of the fallout from
the price war, which would be a stark
turnaround for a car industry that is by far
the world’s biggest.
The problem is that while there has been
huge investment in production capacity,
helped by large state subsidies, domestic
demand for cars has stagnated and
household incomes remain under pressure,
economists say.
In the first seven months of 2023, China
sold 11.4 million cars at home and
exported 2 million, but growth came
almost entirely from abroad. Exports
leaped 81%, but domestic sales only crept
1.7% higher – despite the widespread price
cuts.
“The focus on production and supply is
lopsided,” said George Magnus, research
associate at Oxford University’s China
Center, adding that inadequate attention
to demand ultimately leads to inventory
overhang, price cuts and financial stress.
“China really has to learn to walk on two
legs.”
Chinese plants were already far from
running at full tilt when Tesla first cut prices
in October last year and then again in
January. CEO Elon Musk has since doubled
down on his strategy with more cuts
announced.
Including factories making combustionengine
cars, China had the capacity to
produce 43 million vehicles a year at the
end of 2022, but the plant utilization rate
was 54.5%, down from 66.6% in 2017,
China Passenger Car Association (CPCA)
data show.
At the same time, pay cuts and lay-offs in
the auto industry and its suppliers – which
employ an estimated 30 million people
September 2023 52

according to Chinese state media – are
hitting living standards at a time when
Beijing desperately wants to lift consumer
confidence from near record lows.
Cutting salaries is illegal in China, but
complex pay structures offer ways around
this.
SAIC-VW, for example, reduced Mike Chen’s
take-home pay by reducing working hours
and cutting bonuses without tinkering with
his base pay, which typically covers up to
half the compensation workers expect
when they join.
BYD, China’s largest EV maker, advertised a
position in August at its Shenzhen factory
with an estimated monthly income of
5,000-7,000 yuan, but the base salary was
2,360 yuan ($324).
The average monthly wage in China
was 11,300 yuan in June, according to
government data.
A Reuters analysis of the estimated income
included in recent job adverts from 30 auto
firms showed hourly salaries of 14 yuan
($1.93) to 31 yuan ($4.27), with Tesla, SAIC-
GM, Li Auto and Xpeng at the higher end.
Auto worker Liu, 35, said he quit Changan
Automobile’s plant in Hefei in July after
earning 4,000 yuan in both May and June,
rather than the 7,000 he expected each
month. Based on his past experiences,
Liu was confident he would quickly find
another auto job, but the market had
turned.
“The good old days are gone,” said Liu,
speaking on condition of partial anonymity
to protect his job prospects.
Changan Automobile said working hours
and pay varied from worker to worker.
Several automakers, including Mitsubishi
Motors and Toyota, have laid off thousands
in China after sales slumped. Others, such
as Tesla and battery maker CATL, have
slowed hiring as they delayed expansions.
Hyundai and its Chinese partner,
meanwhile, are trying to sell a plant in
Chongqing.
After being rejected by Li Auto and Xpeng,
Liu almost got a job at Chery’s plant in the
eastern port of Qingdao through a labor
agent, but he refused to pay him a 32,000
yuan commission to secure the position.
“Some factories exhaust you and are willing
to pay you more. Some factories exhaust
you but are stingy. Some factories don’t
exhaust you but starve you as salaries are
too low,” Liu said.
“Maybe I’d be better off as a security
worker in some office building.”
It has been a similarly brutal environment
for auto suppliers in China as car prices
have continued to fall, with the weighted
average transaction price of EVs and
hybrids in June down 15% from January
at 185,100 yuan. SAIC-VW, for example,
offered over half a billion dollars in cash
subsidies for car buyers in March and
a discount of just over $5,100 on its
ID.3 electric hatchback for a period in
July. State-run China Automotive News
estimates there are over 100,000 auto
suppliers in the country. In a March survey
of nearly 2,000 by auto parts trading
platform Gasgoo, 74% said automakers had
asked them to reduce costs. More than
half were asked for reductions of 5% to
10%, higher than the 3% to 5% targets of
previous years. Nine out of 10 companies
expected more such requests this year.
Suppliers typically negotiate prices once a
year, but many have been pressed to lower
prices every quarter in 2023, two senior
executives at auto suppliers said.
Before it kicked off the price war, Tesla
sent emails to its direct suppliers,
encouraging them to lower costs by 10%
this year, according to a person with direct
knowledge of the matter.
And in June, a group of small suppliers
wrote to state-owned Changan Automobile
to push back against 10% price reductions.
The EV battery market has also turned,
with suppliers cutting prices for
automakers. CATL, which counts Tesla as its
biggest client, offered smaller domestic EV
makers discounted batteries in February.
Lithium iron phosphate (LFP) batteries,
the type used by Tesla in China, were 21%
cheaper in August than five months ago,
while nickel-cobalt batteries were 9% to
18% cheaper, RealLi Research data show.
When Chen Yudong, head of Bosch’s China
operations, visited one of his biggest
customers in March, he received an
unusual present, a chopping knife with
a message engraved on its sheath: “Cut
decisively through the mess.”
Three months later, he told Reuters that
price cuts had been more aggressive in
2023 than in previous years. “They’ve
been keeping me awake at night.”
September
2023
54

Honda’s profits double on global sales
Honda reported that its April-June profit
more than doubled on healthy sales of
its motorcycles and cars, as the Japanese
company also received a perk from
favorable exchange rates.
Honda Motor Co. said its fiscal first quarter
profit totaled 363 billion yen ($2.5 billion),
up from 149 billion yen.
Quarterly sales jumped 21 percent to 4.6
trillion yen ($32 billion). Honda’s financial
service division also reported growing
sales.
Honda, which makes the Fit subcompact,
Honda e electric car and Gold Wing
motorcycle, said its profitability improved,
especially in North America, where
production recovered.
Automakers around the world were
slammed by supply shortages because
of production delays related to social
restrictions caused by the COVID-19
pandemic. But such restrictions have
eased, allowing production to pick up
again.
Auto sales were about the same in Japan
in the latest quarter as in the previous
year, while dropping significantly in China
because of intense competition from
makers of battery electric vehicles, Honda
said.
Honda is banking on growth in EVs in the
U.S. market, where it recently announced it
is joining six other companies in the proof
a high-powered charging network across
North America.
Honda said a computer chip shortage
crimped its motorcycle sales in India, while
sales rebounded in Indonesia as production
recovered.
The company said it sold 901,000 vehicles
in the latest quarter, up from 815,000 a
year earlier. It also sold more motorcycles
worldwide at nearly 4.5 million, up from
4.2 million.
September 2023 56

UAE to invest
$54 bln in
energy and
triple renewable
sources
The United Arab Emirates plans to triple its
supply of renewable energy and invest up
to $54 billion over the next seven years to
meet its growing energy demands.
Sheikh Mohammed bin Rashid Al
Maktoum, the UAE’s vice president and
ruler of Dubai, announced the plans on July
4 following a Cabinet meeting.
They also include investments in lowemission
hydrogen fuel and developing
infrastructure for electric vehicles.
He said the updated national energy
strategy “aims to triple the contribution
of renewable energy over the next seven
years and invest 150 billion to 200 billion
dirhams ($40 billion to $54 billion) during
the same period to meet the country’s
growing demand for energy.”
The major oil-producing nation has pledged
to be carbon-neutral by 2050, without fully
explaining how, and is hosting the COP28
climate summit later this year.
The latest announcement included the
formation of an Investment Ministry to be
led by Mohamed Hassan Alsuwaidi.
He currently serves as the deputy chairman
of Masdar, a clean energy firm that has
committed tens of billions of dollars to
worldwide projects. The UAE’s oil wealth
powered its transformation into a major
hub for business and tourism, known for
the futuristic cities of Dubai and Abu Dhabi.
The country requires vast amounts of
energy to power the desalination plants
that irrigate its desert golf courses, air
conditioners that cool its sprawling malls,
and heavy industries such as aluminum
smelters. The UAE has a nuclear power
plant, as well as a large solar park in Dubai
that met 15% of the city’s needs last year,
leaving it mostly reliant on natural gas
imported from Qatar.
September 2023 58

Türkiye becomes partner of Europe’s largest tech fund
The Ministry of Industry and Technology
joined the NATO Innovation Fund, Europe’s
largest technology fund, on behalf of
Türkiye, according to a statement by the
ministry.
The statement said that the ministry
participated in the “NATO Innovation
Fund”, the world’s first multinational
venture capital fund, established at the
Madrid Summit of NATO.
Minister Mehmet Fatih Kacır, whose views
were included in the official statement,
stated that the NATO Innovation Fund
is a great opportunity for Türkiye’s deep
technology start-ups and that the fund will
not only provide long-term investment
support but also access to the markets of
NATO and allied countries.
The 1 billion euro fund, which will finance
technologies that will protect the security
of the Alliance’s 1 billion citizens, is also
Europe’s largest deep technology fund.
The NATO Innovation Fund will play an
active role in strengthening the innovation
ecosystems of the Allies, meeting the
financing needs in deep technologies,
and making the developed technologies
available for use.
The fund will invest in start-ups that
develop technologies such as artificial
intelligence, big data, autonomous
systems, new materials and advanced
manufacturing and quantum, which are
critical to the security of the alliance, and
venture capital funds that support these
technologies.
Türkiye, which is among the 23 allied
countries financing the fund, will be the 6th
largest partner of the fund with financing
of approximately 45 million euros for 15
years.
Together with the North Atlantic Defense
Innovation Accelerator (DIANA), the fund
will have a decisive role in preserving
NATO’s technological superiority and
developing breakthrough technologies
that can be used for civilian and military
purposes.
The NATO Innovation Fund, which was
established as a result of the financial
commitments and hard work of 23 NATO
allies, including Türkiye, was announced to
the public at the Vilnius Summit, attended
by President Recep Tayyip Erdoğan.
September 2023 60

Türkiye’s 2023 H1 sees $4.8B in
foreign direct investments
Türkiye received foreign direct investments
(FDI) worth $4.8 billion (TL 125.9 billion)
in the first half of 2023, said the head of
Türkiye’s International Investors Association
(YASED).
Some $2.5 billion of these investments
were mergers, acquisitions or capital
inflows, Engin Aksoy, the chairperson of the
association told Anadolu Agency (AA).
“Based on the results of our PULSE survey
conducted with YASED top executives
for the June period, we estimate that
macroeconomic stability and potential
improvements in the regulatory framework
could trigger an additional investment
inflow of at least $7.1 billion in the next six
months,” he noted.
Recalling Türkiye’s target to take a share
of 1.5% from global direct investments, he
said the current situation is now below its
potential.
Aksoy highlighted that since 2002,
European Union countries have taken the
lead with a 59% share in all investments
coming to Türkiye, and this trend has
continued in the first six months of this
year. The EU countries’ share in foreign
direct investments during the first sixmonth
period was at 56%, Aksoy said.
“Among countries, the Netherlands
accounted for 23% of total investment
capital inflows, followed by Russia with
15%, the United Arab Emirates (UAE) with
13%, Germany with 7% and Ireland with
7%. Sectors such as wholesale and retail
trade and electricity production stood out
in the investment capital inflows of the first
six months of 2023. In addition to these
sectors, investment inflows in the field of
information and communication, which
was prominent last year, also continued,”
Aksoy explained.
Comparing Türkiye to countries like
Poland and Hungary, Aksoy noted that
Türkiye is still attractive due to its tax
incentives compared to other countries.
Additionally, he mentioned that while
Türkiye has not fully utilized its potential, it
holds advantages in areas such as human
resources and infrastructure.
Aksoy stated that as YASED, they
consider the two main factors that play
the most important role in increasing
Türkiye’s competitiveness in terms of
international direct investments are the
provision of a predictable regulatory
framework based on the rule of law and
macroeconomic stability with the vision
of moving the country to the group of
high-income countries. In addition to these
prerequisites, Aksoy mentioned other
topics that are part of the current dynamics
of the global competitive environment
including integration into global supply
chains, achieving digital transformation,
adopting sustainable development and
enhancing human capital.
“I would also like to express that the
members of YASED, which represents
Türkiye’s companies, will continue to
contribute to our country’s sustainable
development with high-value investments,
and any improvement in the investment
environment will result in a net increase in
both existing and new investments.”
September 2023 64

IEA flags risk of higher oil prices, cuts
2024 demand view
The International Energy Agency (IEA) said
OPEC+ supply cuts could erode inventories
in the rest of this year, potentially driving
prices even higher, before economic
headwinds limit global demand growth in
2024.
Tighter supply driven by OPEC+ oil
output cuts and rising global demand has
underpinned a rally in oil prices, with Brent
crude hitting highs of over $88 a barrel, the
highest since January.
The IEA said if OPEC+ current targets are
maintained, oil inventories could draw by
2.2 million barrels per day (bpd) in the third
quarter and 1.2 million bpd in the fourth,
“with a risk of driving prices still higher”.
“Deepening OPEC+ supply cuts have
collided with improved macroeconomic
sentiment and all-time high world oil
demand,” the Paris-based energy watchdog
said in its monthly oil market report.
The Organization of the Petroleum
Exporting Countries (OPEC) and its allies,
together known as OPEC+, began limiting
supplies in late 2022 to bolster the market
and in June extended supply curbs into
2024.
The IEA said that in July, global oil supply
plunged by 910,000 bpd in part due to
a sharp reduction in Saudi output. But
Russian oil exports held steady at around
7.3 million bpd in July, the IEA said.
Next year, demand growth is forecast
to slow sharply to 1 million bpd, the IEA
said, citing lackluster macroeconomic
conditions, a post-pandemic recovery
running out of steam and the burgeoning
use of electric vehicles.
“With the post-pandemic rebound largely
completed and as multiple headwinds
challenge the OECD’s outlook, oil
consumption gains slow markedly,” the IEA
said, referring to Organisation for Economic
Co-operation and Development nations.
The IEA’s demand growth forecast is down
by 150,000 bpd and contrasts with that of
OPEC, which maintained its forecast that oil
demand will rise by a much stronger 2.25
million bpd in 2024.
“The global economic outlook remains
challenging in the face of soaring interest
rates and tighter bank credit, squeezing
businesses that are already having to cope
with sluggish manufacturing and trade,”
the IEA said. For 2023, the IEA and OPEC
are less far apart. The IEA expects demand
to expand by 2.2 million bpd in 2023,
buoyed by summer air travel, increased
oil use in power generation and surging
Chinese petrochemical activity. OPEC sees a
rise of 2.44 million bpd.
Demand is forecast to average 102.2 million
bpd this year, the IEA said, with China
accounting for more than 70% of growth,
despite concerns about the economic
health of the world’s top oil importer.
September 2023 66

EU’s carbon tax to impact countries, including Türkiye
The European Union’s major trading
partners, including Türkiye, will be
impacted by the bloc’s carbon tax, experts
have said.
The competition will intensify for the
nations which are slow in preparations to
comply with the carbon tax regulations,
such as Türkiye, China, India, the U.S., the
U.K. and Canada, they warned.
Brussels’s carbon border adjustment
mechanism (CBAM) is set to enter into
force as of Oct. 1. The mechanism aims at
encouraging cleaner industrial production
in non-EU countries in a number of key
industries.
Türkiye is one of the major trading partners
of the EU. The country’s exports to the bloc
are nearly 96 billion euros, and the carbon
tax policy is particularly important for
Türkiye’s cement and steel sectors.
“The CBAM is forcing countries that export
steel, aluminum, cement, fertilizers,
hydrogen and electricity to the EU to
reduce emissions. Türkiye is one of those
nations,” said Ahmet Atıl Aşıcı from Istanbul
Technical University’s Department of
Management Engineering.
Aşıcı recalled that Türkiye ratified the Paris
Agreement in 2021 and pledged to have
net-zero carbon emissions by 2053.
Türkiye can shut down all thermal power
plants by 2035 without putting energy
supply security at risk, according to Aşıcı.
Türkiye has been making preparations
for years against the possibility of the
introduction of the carbon tax and this
should alleviate the financial impact of the
tax on the country, said Fabio Passaro at
Climate Bonds Initiative. The carbon tax will
have a direct impact on several industries,
such as steel and cement, as well as
countries such as Türkiye, the Middle
Eastern and Northern African Nations,
Russia and Morocco, according to Jingwei
Jei at Sustainable Fitch ESG.
September 2023 68

Driverless taxis gain ground in San Francisco
California authorities have taken a major
step forward in expanding driverless taxi
services in San Francisco, giving the green
light for operators Waymo and Cruise to
compete with ride-share services and cabs.
The California Public Utilities Commission
(CPUC) heard six hours of public comment
before voting three-to-one to let Waymo,
a unit of Google-parent Alphabet, and
General Motors-owned Cruise essentially
run 24-hour robotaxi services in San
Francisco.
Waymo cars were cleared to travel at
speeds as fast as 65 miles per hour (105
kilometers per hour) without human
drivers at the wheel, even in some
inclement weather.
It also won permission to offer driverless
car rides to paying passengers in its home
city of Mountain View, in Silicon Valley.
Cruise was approved to run fared
passenger service in San Francisco at no
faster than 35 miles per hour and not
through dense fog or heavy smoke.
Previously, Cruise could charge customers
only during certain hours of the day.
Waymo had not been allowed to charge for
rides without a human driver on board.
Driverless cars were first introduced in San
Francisco in 2014 with a mandatory human
“safety driver” on board.
Four years later, California scrapped its
requirement for a human driver to be in
the car.
The CPUC session drew commenters from
all sides of the issue, with some calling
robotaxis unsafe menaces while others
lauded them as solutions to everything
from climate change to road rage.
Driverless cars have gotten stuck in the
middle of roads, blocked bus lanes or
even interfered in police or firefighter
operations.
But others at the hearing praised the
vehicles for giving independence to people
with disabilities, making roads safer and
helping eliminate discrimination.
Others opposed cars of any kind, saying
the future lies in clean, convenient and
affordable public transit.
September 2023 70