Automotive Exports October 2023

1

Monthly automotive aftermarket magazine
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H. FERRUH ISIK
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Heading to Automechanika Dubai 2023
Turkish automotive industry, with its vehicles and auto parts manufacturing sub-sectors,
is one of dynamically exporting industries of the Turkish economy. As noted earlier in this
column, the auto parts industry of Türkiye has developed rapidly as a consequence of
developments in the automotive industry. The 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 always ample potential for exports. Business people
operating in the industry have become outward oriented more than ever before.
These companies not only dominate the primary supply markets but also capture an
increasing share of the replacement market. Their continued success in exports markets
depend on close technical links with part makers in industrialised countries and the
willingness of their foreign partners to integrate their Turkish counterparts into their
production-distribution networks as regular suppliers of high quality, low-cost components.
Türkiye’s auto parts industry exports are increasing steadily year by year. Türkiye is the only
country within the surrounding geographical area to have established a well-advanced
automotive industry. Therefore, the automotive industry is strategically important both for
Türkiye and for firms that will invest in Türkiye. We think that technology will always be the
key for the survival of the automotive industry. History says so.
This month, we participate in Automechanika Dubai 2023 to convey the message of the
Turkish automotive and auto spare parts exporters. The stars of the automotive world will
be meeting at Automechanika Dubai as usual.
Automechanika Dubai, showcasing the latest global trends, has turned out to be a
remarkable automotive aftermarket platform for the Middle East and Africa.
The Fair which covers the full range of automobile, truck and bus parts, equipment,
components, accessories, tools, and services continues to bring world renowned
manufacturers, suppliers and service providers in touch with one of the most important
growing markets in the world. The markets targeted by the Fair are widely recognised as the
most attractive in the world in terms of future potential.
Our publications remain at the service of those business people seeking to increase their
share in the increasingly competitive automotive markets.
We wish lucrative business for all participants.
automotiveexport
automotiveexports

Automechanika Dubai- The international trade show for the
automotive aftermarket industry in the Middle East
Automechanika Dubai-is the ideal onestop
trade platform in the MEA region for
businesses in the automotive aftermarket
and service industry seeking to expand
their network, explore opportunities,
get updated with the latest trends and
solutions while evaluating market trends
and sharing expertise.
20th anniversary edition which is held
from 2-4 October 2023 promises to be
bigger, better and grander with new
features, and 14 halls featuring 1,800+
exhibitors from 60+ countries and 20
official country pavilions.
With thousands of products from hundreds
of exhibitors from around the world on
the show floor, along with numerous show
features including the Academy, Awards,
AfriConnections, Modern Workshop,
Tools & Skills Competition and Innovation
Zone, Automechanika Dubai is a mustattend
for all automotive aftermarket
professionals to meet, network, learn,
engage and grow your business. What
makes a modern workshop? Latest tools,
innovative equipment, modern machinery,
advanced diagnostic devices and above
all skilled people who are updated with
the latest industry know-how. During
Automechanika Dubai’s Modern Workshop,
garage and workshop professionals can
enhance their knowledge by taking part in
training programmes, workshops and live
presentations that will showcase the most
modern, latest and innovative solutions for
the garage and workshop sector.
Are you interested in exhibiting at
Automechanika Dubai? Whether you’re
a manufacturer looking to enter the
market or a well-established distributor/
supplier, Automechanika Dubai is the
perfect gateway for you to be part of the
opportunity that the Middle East and
African automotive aftermarket industry
presents.
To sum up:
•1000+ Exhibitors
•58+ Exhibiting Countries
•20+ Country Pavilions
•20,000+ Visitors
•130+ Visiting Countries
October 2023 10

Türkiye seeking to lure more foreign carmakers
Talks are ongoing with carmakers from
Europe and Asia, including China, to lure
more investments into Türkiye’s automotive
sector, Industry and Technology Minister
Fatih Kacır has said.
“We are hoping that at least one of them will
announce an investment decision by the end
of the year,” he said.
Those companies may produce electric and
hybrid vehicles in Türkiye, and the western
province of Manisa appears to be the likely
candidate for possible plant investment,
Kacır said.
“Volkswagen made a mistake. It missed
an opportunity in Manisa. I hope they
reconsider their decision. The site for a plant
is ready in Manisa for those that want to
make an investment,” he added.
The German carmaker had abandoned its
plan to build a factory in Manisa with a more
than $1 billion investment.
“We are holding talks with almost all
carmakers from Europe and the Far East,
including China. We, particularly, focus on
luring investments for new generation,
electric and hybrid vehicle production.Talks
are ongoing with companies, which currently
do not have investments in Türkiye,” he told
a group of reporters.
Kacır also said one of the global carmakers,
which already operates in Türkiye, may
announce new investments. He, however,
did not name the company or provide
other details. The minister recalled that the
government provided a substantial incentive
for Ford’s electric vehicle production
initiative.
“Also, Toyota will begin manufacturing a new
hybrid model vehicle in Türkiye. There is
strong demand from companies for electric
vehicle investments in the country,” he said,
noting that the government will continue to
provide support for EV production. Türkiye is
one of the largest automotive manufacturers
in Europe. Last year, 1.35 million vehicles
were produced in the country, pointing to a
6 percent increase compared with 2021.
Passenger car production grew 3.6 percent
in 2022 from the previous year to nearly
811,000, according to data from the
Automotive Manufacturers’ Association
(OSD).
In the first five months of 2023, automotive
production leaped 20 percent to 616,000,
with passenger car output rising more than
30 percent year-on-year to 386,000.
The Automotive Distributors and Mobility
Association (ODMD) reported earlier that
556,000 passenger cars and light commercial
vehicles were sold in January-June, up 56
percent from the same period last year.
Passenger car sales grew 55 percent to
430,400.
October 2023 12

Automotive industry plugged into innovation
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 fullfledged
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.
October 2023 16

Auto production rises 13 percent in eight months
Turkish carmakers produced more than
943,000 vehicles in the first eight months
of 2023, a 13 percent increase from a year
ago, according to the data from Automotive
Manufacturers’ Association (OSD).
Passenger car output grew 21 percent yearon-year
to nearly 600,000, but the annual
increase in commercial vehicle production
was lower at 2 percent to 344,000.
Local carmakers boosted their exports by
11 percent, shipping some 660,000 vehicles
to foreign markets in the January-August
period, with passenger car exports rising 26
percent to 426,000.
The industry’s export revenues amounted
to $23.3 billion during this period, pointing
to a robust 17 percent annual increase.
In August alone, its export revenues rose
by 21 percent to $2.7 billion.
In the first eight months of the year,
787,197 vehicles were sold on the local
market, marking a 63 percent increase
compared with the same period of 2022.
Passenger car sales grew 64 percent yearon-year
to nearly 583,000. Vehicle sales
grew 73 percent year-on-year in August
alone to 90,400, while the passenger car
market expanded 88 percent to 66,000.
Türkiye increased passenger car imports
by 118 percent from a year ago to nearly
52,000, which meant that imported cars
accounted for 78 percent of all cars sold on
the local market.
In August, both total vehicle and passenger
car production declined by 21.2 percent
year-on-year. Some large carmakers
suspended production due to maintenance
work which could explain the drop in the
industry’s output. The Turkish automotive
industry has a total production capacity of
2 million vehicles. In terms of production,
it ranks fourth in Europe and 14th in the
world, employing more than 500,000
people.
October 2023 18

Industrial output rises 7.4 percent
Industrial production increased by 7.4
percent in July from a year ago, after rising
at a paltry 0.2 percent in the previous
two months, the official data showed
on Sept. 11. Manufacturing output also
expanded 7.4 percent year-on-year, while
the annual increase in the capital goods
sector’s production was 25.6 percent,
said the Turkish Statistical Institute (TÜİK).
Intermediate goods production grew 3.2
percent from July 2022. The 16 percent rise
in the durable goods sector was noticeable.
In the energy sector, production increased
by 0.9 percent in July from the same month
of last year. TÜİK said industrial production
fell 0.4 percent month-on-month in July,
after rising 1.2 percent and 1.4 percent on
a monthly basis in June and May.
The growth of the Turkish manufacturing
sector moderated in August as firms faced
challenges in securing new business, a
survey conducted jointly by the Istanbul
Chamber of Industry (ISO) and S&P Global
showed.
The headline PMI in August stood at 49,
from 49.9 in July, below the 50 no-change
mark for the second month running.
Meanwhile, interest rates on commercial
loans climbed above the interest rates local
banks charge on housing and car loans as
of Sept. 1, reaching 38 percent.
The interest rates on personal loans,
car loans and housing loans were 53
percent, 36.7 percent, and 35.7 percent,
respectively. The interest rates on loans
have been rising after the Central Bank
started to hike its policy rate. Since June,
the bank delivered a total of 1,650 bps
hike in the one-week repo auction rate to
25 percent. The Central Bank’s Monetary
Policy Committee will meet again on Sept.
21 to decide about its policy rate.
October 2023 24

Automotive exports expected to be $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.
October 2023 26

Chinese EV
Skywell maker
agrees deal to
build Türkiye
battery plant
China’s technology company Skyworth has reached an investment
agreement with a Turkish group to build a battery factory in
Türkiye, a statement said.
The manufacturer of the Skywell electric vehicle (EV) brand,
Skyworth said the deal was reached with Ulubaşlar Group to
develop and produce batteries, without disclosing the location of
the factory.
The companies will invest $25 million each in the plant that is
planned to be opened by the first quarter of 2024, the statement
said.
The factory will manufacture batteries featuring 800V+4C superfast
charging technology architecture. This will enable a charging
power to increase from 120 kW to 480 kW, allowing the vehicles to
charge 80% in eight minutes, according to the statement.
“The battery is a key element in the transformation of the
automotive market, and producing this technology here will
provide Türkiye with important capabilities and will make
significant contributions to the economy of our country,” said
Mahmut Ulubaş, CEO of Skywell Türkiye.
Ulubaş also stressed on the impact the investment would have on
employment and exports.
Among others, the Chinese company could also launch production
of Skywell’s new models that are planned to be launched on the
market within three years in Türkiye, said Ulubaş.
Ulubaşlar Group’s subsidiary Ulu Motor is a distributor of Skywell
operating in Türkiye and 15 other countries.
Ulubaş’s remarks were echoed by Wu Longba, co-founder and CEO
of Skywell, who stressed the company’s close cooperation with Ulu
Motor and also noted the plans to establish an assembly line in the
country.
“We will initiate feasibility studies for this collaboration (battery
factory) as soon as possible, which will be a significant turning
point in Türkiye-China relations. We are very enthusiastic about this
partnership,” he noted.
“Moreover, we plan to establish a vehicle production line, bring
spare parts supply system to Türkiye, and manufacture certain
components here,” he said.
“We anticipate various future business partnerships with Ulu Motor
throughout these processes. Our objective is to contribute to the
development of Türkiye’s new energy vehicle industry technology
and capacity.”
October 2023 28

BMW to invest $750M in UK Mini
plants to fuel electric car output
German auto giant BMW announced it will
invest 600 million pounds ($750 million)
at its U.K. plants to take its iconic Mini
brand all-electric by 2030, a fresh boost
for Britain’s car industry following years of
Brexit-related uncertainty.
From 2026, BMW will make two electric
models at its Mini plant in Oxford – the
Mini Cooper 3-door and the compact
crossover Mini Aceman. The plant will
make only electric models as of 2030. The
same two models will also be made in
China and exports of those cars will begin
in 2024. British business minister Kemi
Badenoch will visit the plant in Oxford for
the announcement of the investment,
which the government said boosted total
investment in the automotive sector in
recent years to over 6 billion pounds.
“BMW’s investment is another shining
example of how the United Kingdom is
the best place to build cars of the future,”
British Prime Minister Rishi Sunak said in a
statement.
The carmaker said the U.K. government
had provided support for the investment
but did not provide details.
BMW will also invest in its U.K. plant
in Swindon which makes parts for Mini
models. The company did not say what
would happen to its engine plant in Hams
Hall.
The small, fast and affordable original Mini
went on sale in 1959 and has remained
popular under BMW since it revived the
brand in 2001, but its future in Britain has
been uncertain for years.
Still, the industry remains on edge with
both Britain and Europe’s carmakers calling
for a delay in the implementation of post-
Brexit “rules of origin”, under which 45%
of the value of an EV being sold in the
European Union must come from Britain or
the EU from 2024 to avoid tariffs.
October 2023 30

EU ignites anti-subsidy probe into China’s EV ‘market distortion’
European Commission President Ursula
von der Leyen announced an anti-subsidy
investigation into electric vehicles coming
from China.Global markets are flooded
with cheap Chinese electric cars, von der
Leyen said, addressing European Union
lawmakers in Strasbourg, France.
Their price is kept artificially low by “huge
state subsidies,” she said, leading to market
distortion in the EU. The EU however does
not tolerate market distortions either from
within the bloc or from outside of it, von
der Leyen said.
“Europe is open to competition, not for a
race to the bottom,” she said.
An anti-subsidy investigation can
potentially lead to punitive duties being
imposed on imports to the EU.
Different efforts are currently underway
in several EU economic sectors to reduce
the bloc’s dependence on imports from
countries like China or Russia and to
protect domestic companies.
In the global race for profitable clean tech
industries, von der Leyen previously called
for greater independence from Chinese
imports and the production of more
emissions-reducing technology in the bloc.
In March, the European Commission
presented a proposal for a law on the
supply of critical raw materials needed for
clean-tech technologies, including powerful
batteries. The draft bill, which still needs
to be approved by EU capitals and the
European Parliament, aims to ensure that
the bloc does not remain overly dependent
on raw material imports from individual
countries, including China but diversifies its
suppliers.
At the same time it was “vital to keep open
lines of communication and dialogue with
China,” she said in Strasbourg.
At a planned EU-China summit later this
year, von der Leyen is to advocate for
reducing trade and economic risks in the
EU’s relations with China while maintaining
dialogue with the country, she said.
Development Road project to enter implementation phase
“We, at a point where three continents converge, are open to any
plan that promotes cooperation.”
“However, it should be known that in our region, the effective
and sustainable operation of energy and transportation corridors
without Türkiye’s involvement is not possible.”
The Trans-Caspian International Transport Route, which
connects the Turkic world to Europe via the Caspian Sea, and
the Development Road that will pass through Iraq to Türkiye,
underscore Türkiye’s central role, he added. Some international
developments such as the Russia-Ukraine war and the COVID-19
outbreak, which have deeply affected the global and geopolitical
environment, have proven that the Trans-Caspian International
Transport Route is a reliable alternative route, he said.
The major infrastructure and transportation project planned to
stretch from the Iraqi province of Basra to the Turkish border is
expected to enter the implementation phase within a few months,
Türkiye’s top diplomat said.
“We hope to move into the implementation phase of the
Development Road project, which is of great importance for
prosperity and stability in the Middle East, within the next few
months,” Foreign Minister Hakan Fidan told the the 10th World
Turkish Business Council (DTIK) Congress in Istanbul.
Türkiye and Iraq are working to build a land and railroad
transportation corridor from the Iraqi province of Basra to the
Turkish border. Referring to the agreement on the India-Middle
East-Europe Economic Corridor signed at the G-20 summit in New
Delhi, Fidan said:
October 2023 34

Fitch cites
Türkiye’s policy
shift as driver
behind outlook
upgrade
Fitch Ratings cited a return to more
conventional economic policymaking since
the May election as the primary driver
behind its decision to upgrade Türkiye’s
credit rating outlook.
The credit rating agency revised the
outlook on the nation’s long-term foreigncurrency
issuer default rating to “stable”
from “negative.” It affirmed its debt grade
at “B,” five notches below investment
grade.
In its assessment released, the agency said
the revision reflected the return to a more
conventional and consistent policy mix that
reduces near-term macro-financial stability
risks and eases balance of payments
pressures, according to Erich Arispe
Morales, a senior director in Fitch Ratings’
sovereigns group.
In an interview with Anadolu Agency (AA),
Morales shared insights into Türkiye’s
economic outlook, highlighting several key
factors that have led to a more positive
assessment.
He also discussed the country’s growth
prospects and weighed in on the possibility
of an upgrade to “investment grade.”
Morales explained that the country has
moved away from targeted financial
regulations that were perceived as
“interventionist and unpredictable.”
“This refers to reducing the monetary
policy rate as the main mechanism to
signal the central bank’s policy direction.
We have also seen that policy is more
consistent than before and we have a
very mixed policy focused on growth and
employment,” he said.
This shift toward more consistent and
growth-focused policies despite previous
macroeconomic imbalances has helped
stabilize the country’s economic outlook,
he added.
“We can point out also that we have
seen some reduction in uncertainty after
the elections, given now that the policy
direction is clear,” he said.
The change of policy direction since the
May election, though, has seen President
Recep Tayyip Erdoğan bring in two former
Wall Street bankers to run the economy.
Treasury and Finance Minister Mehmet
Şimşek and Central Bank of the Republic
of Türkiye (CBRT) Governor Hafize Gaye
Erkan have shifted away from ultra-loose
monetary policy and have dramatically
raised interest rates in a bid to tackle the
country’s long-term inflation problem.
Under Erkan, the central bank has roughly
tripled its benchmark policy rate to 25%
and pledged that monetary tightening will
gradually be strengthened as needed.
Regarding Türkiye’s economic growth,
Morales acknowledged that the second
quarter of the year saw greater policy
stimulus due to the general elections.
Looking ahead, Fitch Ratings predicts a
growth rate of around 4.3% for this year.
He said, however, that if policy consistency
and tighter fiscal measures continue,
growth could slow to 3% next year before
recovering to approximately 3.4% in 2025.
While acknowledging that credit pressures
have eased due to recent policy shifts,
Morales emphasized that macroeconomic
and external financial challenges persist.
Türkiye currently faces inflation of 59% as
well as challenges related to an exploitative
foreign exchange-protected Turkish lira
deposit scheme, he said.
Morales pointed out that achieving
“investment grade” status for a country is
a long-term effort and requires sustained
policy improvements over time.
This effort not only boosts economic
resilience but also enhances predictability
for investors and benefits economic actors
in Türkiye, he added.
Morales also commented on recent
announcements, including funding from
Gulf countries and the World Bank’s
decision to double investments in Türkiye.
He highlighted the importance of access
to financing, especially concerning the
country’s current account deficit.
The three-year commitment of bilateral
and official financing represents a positive
development for Türkiye, providing a stable
source of funding for external accounts, he
underlined.
In terms of opportunities, Morales noted
that Türkiye currently enjoys a degree of
credibility among investors due to recent
policy adjustments.
Despite past reversals, the government’s
efforts to address macroeconomic
imbalances and provide stability have
garnered investor confidence, he
underscored.
However, geopolitical risks, exposure to
trade shocks, and global economic patterns
remain concerns for the nation.
The key near-term risk, according to
Morales, is policy predictability, especially
with local elections on the horizon in
March 2024, where additional stimulus
measures could be deployed.
October 2023 38

Togg dominates
as electric
vehicle sales
boom in Türkiye
Sales of electric cars in Türkiye have been
booming this year, capturing a market share
unseen to date, dominated by the first
homegrown battery-powered vehicle brand
that has been adding momentum to its
deliveries.
Nearly 22,900 electric vehicles (EVs) have
been sold from January through August
of this year, according to the Automotive
Distributors and Mobility Association
(ODMD) data.
This translates into over 597% increase
compared to 3,283 electric cars that were
sold in the same period a year ago.
Their gasoline-electric hybrid rival also
maintained a robust pace and saw sales
jump 65.7% in the first eight months to
60,489 units.
Despite having launched its deliveries
just four months ago, Togg, Türkiye’s first
domestically produced electric vehicle, has
managed to swiftly become the bestselling
brand with a top model in the electric car
segment. The brand said it delivered 3,400
of its T10X as of the end of August. Of this,
1,965 were delivered.
Mass production of the fully electric
C-segment SUV was launched last October,
and deliveries started in late April. The
carmaker had said it planned to deliver
about 20,000 units by the end of 2023.
Overall, passenger cars and light
commercial vehicle sales in Türkiye from
January through August reached 755,282
units, an increase of 64.7% versus the same
period a year ago.
Passenger cars surged by 64.3%, totaling
582,419 units, while light commercial
vehicle sales witnessed a 66.4% growth,
reaching 172,863 units. Demand has been
notably high as depreciation in the Turkish
lira and soaring prices prompted consumers
to continue to opt for cars they see as a tool
to safeguard themselves from high inflation.
Annual inflation surged to 58.94% over the
12 months ending in August. It had reached
a 24-year high of 85.5% last October and
stood at 47.83% this July after regressing to
as low as 38.21% in June.
Battery-powered and hybrid vehicles saw
their market shares reach 3.9% and 10.4%,
up from just 0.9% and 10.3% in the first
eight months of last year, respectively.
Cars powered by gasoline held a 61.6%
share in the overall sales in the January-
August period, down from 70% a year
ago, while that of diesel vehicles fell to
15.7%, from 17%. Togg’s T10X now holds
an 18.2% share in the overall EV market,
a 33% in electric SUV and a 55.3% in
C-SUV segments. It accounted for 3%
of all passenger car sales in August. The
company has become the leading brand
and model in the Turkish electric vehicle
market, overshadowing international
competitors like Tesla, which opts not to
disclose country-based sales figures. In
addition to Tesla, many other brands have
launched sales of models they had earlier
announced. Many Chinese companies have
also ramped up deliveries to the country.
The T10X is initially being sold with one
engine type and two battery options. It will
feature battery packs with 52.4 and 88.5
kilowatt-hour capacities, boasting ranges
of 314 and 523 kilometers (195 and 325
miles). The batteries of the T10X can be
recharged to up to 80% from 20% in less
than 28 minutes at fast-charging stations.
A consortium of five Turkish companies
called the Automobile Initiative Group
of Türkiye, or Togg, is manufacturing the
vehicle in cooperation with the Union of
Chambers and Commodity Exchanges of
Türkiye (TOBB). Besides the SUV, Togg will
manufacture four other models – a sedan,
C-hatchback, B-SUV and B-MPV – by 2030.
The sedan will follow the mass production
of the SUV. The current production capacity
of around 100,000 vehicles per year will
reach 175,000 once Togg’s factory reaches
total capacity. President Recep Tayyip
Erdoğan has said some 28,000 units would
be produced this year. The brand aims
to manufacture 1 million vehicles across
the five segments by 2030. Togg plans to
begin exports as of 2025, while the initial
production will be tailored for the domestic
market.
October 2023 42

Toyota announces initiative for solid state batteries
said in a statement. It plans to deliver 1.5 million EVs in 2026 by
expanding its battery EV lineup and developing technology.
EV owners usually have charging stations in their homes and keep
their cars plugged in overnight to recharge. That’s one of the main
reasons Toyota has long insisted that hybrids are a better solution.
A hybrid recharges as the car runs, but it also has a gasoline engine
in addition to an electric motor.
Toyota President Koji Sato has said the company must play catchup
after falling behind in the EV sector.
In its latest announcement, Toyota said it was also working on
innovating lithium-ion batteries, the battery type now in most EVs,
and wants to offer new affordable options.
Toyota plans to make an all solid-state battery as part of its
ambitious plans for battery electric vehicles, the company said,
amid mounting criticism Japan’s top automaker needs to do more
to fight climate change.
Toyota Motor Corp. aims for a commercial solid-state battery as
soon as 2027. Charging time, one of the main drawbacks of electric
vehicles, will get shortened to 10 minutes or less, the company
October 2023 44

Fisker announces the Fisker Ocean has the lowest
published carbon footprint of any electric SUV
Fisker Inc. driven by a mission to develop
the world’s most emotional and sustainable
electric vehicles, released its Life Cycle
Assessment (LCA) report – a cradle-to-grave
analysis that details the carbon footprint
of the Fisker Ocean all-electric SUV. With
the lowest published carbon footprint of
any electric SUV in its market segment, the
“world’s most sustainable vehicle” lives up
to its ambitious promise, from raw material
extraction to beyond “end of use.”
“Since we founded Fisker Inc., building
the most sustainable electric vehicles is
not just a marketing slogan; its core to
our culture,” Chairman and CEO Henrik
Fisker said. “It means shifting antiquated
thought processes from across a 100-yearold
industry, challenging the supply chain
down to the most minute details, working
with partners to improve the way cars are
assembled, the energy they are charged
with, and working on the way our vehicles
are recycled after they come off the road.
Our LCA confirms that climate neutrality
has been a priority, since well before we
started building vehicles.”
Unique in the industry, Fisker built
sustainability into its strategy well before
becoming a publicly traded company.
Fisker prioritizes using the lowest possible
amount of virgin materials, delivering the
most energy-efficient vehicles possible,
evaluating how to ensure the least amount
of material goes to landfill at end of use,
and developing methods for full vehicle
and battery reuse and recycling. The
company’s emphasis on supporting a
“circular economy” includes prioritizing
how battery materials may be pushed back
into upstream sourcing.
“The results are clear: The carbon saved
by choosing a Fisker Ocean over an
average gasoline vehicle equals the carbon
sequestered from 39 acres of US forests,”
added Fisker. “We challenge every partner
and find like-minded suppliers that strive to
do better. It’s no accident the Fisker Ocean
is made in a factory powered by renewable
energy. This is only the beginning. We will
strive to improve every step of the way
as we move toward the upcoming Fisker
Alaska, PEAR, and Ronin vehicles.”
Fisker’s LCA is unique in the industry
in that it utilizes mostly primary data
rather than estimates. Tier 1 suppliers
are pushed to provide accurate carbon
accounting, while the company’s processes,
measurement, and the impact of the
earth and the atmosphere are transparent
at unprecedented levels. Fisker has
commenced vehicle deliveries in both
the United States and Europe, following a
unique dual-market certification strategy
as it launched simultaneously. The Fisker
Ocean One is a launch edition model of
the $68,999[1] Fisker Ocean Extreme,
with a 113 kWh battery pack (106 kWh
usable) and an EPA range of 360 miles[2]
on standard 20” wheels and tires, which is
the longest range of any new electric SUV
in its class[3]. In Europe, the Fisker Ocean
Extreme has a WLTP range of 707km/440
UK miles[4] on standard 20” wheels and
tires, which is the longest range of any
electric SUV sold in Europe today. The
all-electric SUV starts at $37,4992 for the
Fisker Ocean Sport trim level in the US.
[1] Estimated pricing shown applies to
the continental US and excludes delivery,
finance, tax, title, registration, and other
government fees. Maintenance is not
included. Pricing is subject to change
and will be based on your final vehicle
configuration. Pricing does not include
government incentives you may be entitled
to. [2] EPA estimated range. Actual results
may vary for many reasons, including
driving conditions, wheel size, state of
battery charge, and how the vehicle is
driven and maintained.
[3] Mid-size SUVs with an MSRP under
$200,000 [4] This WLTP range number
applies to Fisker’s European markets. WLTP
measurements conducted on Fisker Ocean
Extreme with standard 20” and optional
22” wheels. Actual range will vary with
conditions such as external environment,
vehicle configuration, wheel size and
vehicle use.
October 2023 46

Europe’s electric car market share overtakes diesel
The sales of new electric battery vehicles
overtook diesel car purchases in Europe
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. 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 month’s
improvements indicate that the European
automotive industry is recovering
from supply disruptions caused by the
pandemic,” it added.
October 2023 48

Lear wins 4 First-Place J.D. Power 2023 Awards,
leads in the number of top 3 finishes
Lear Corporation (NYSE: LEA), a global
automotive technology leader in Seating
and E-Systems, received four first-place
J.D. Power 2023 U.S. Seat Quality and
Satisfaction Study℠ awards.
The company outpaced the competition in
both the number of first-place awards and
the number of its seats finishing in the top
three of the study’s vehicle segments.
The overall results showcase Lear’s
dedication to quality and operational
excellence for its global customers. The
categories and Lear’s results include:
First Place
•Mass Market Small / Compact SUV –
Chevrolet Equinox
•Mass Market Midsize / Large SUV –
Chevrolet Blazer (tie)
•Premium Car – Porsche 718
•Premium SUV – Land Rover Range Rover
Sport
Second Place
•Mass Market Truck / Van – Hyundai Santa
Cruz
Third Place
•Mass Market Small / Compact SUV – Ford
Bronco
•Mass Market Truck / Van – GMC Sierra HD
•Premium Car – Audi A4 and Porsche 911
“This recognition speaks to the steps
we have taken over the past decade
to consistently invest in our talent,
operational excellence, and innovation,”
said Frank Orsini, Executive Vice President
and President, Seating. “At Lear, we will
continue to work to ensure we have the
best capabilities and technology to design
and manufacture world-class quality seats.”
Conducted from February through May
2023, the Seat Quality and Satisfaction
Study is based on responses from 93,380
purchasers and lessees of new 2023 modelyear
vehicles who were surveyed after 90
days of ownership. Seat quality is measured
by the number of problems experienced
per 100 vehicles (PP 100) during the first
90 days of ownership, with a lower score
reflecting higher quality.
Turkish economy resilient to global challenges, says VP Yılmaz
The Turkish economy has remained resilient despite the shocks in
the global economy, says Vice President Cevdet Yılmaz, reiterating
that the government’s priority will bring down inflation to single
digits. The government spent some 762 billion Turkish Liras for the
earthquake-related expenditure, while at the same time increased
wages and social spending, Yılmaz told lawmakers in parliament
during discussions on the additional budget. “Our economy
performed better in many indicators, chiefly in growth and job
production compared with other countries’ economies despite the
ongoing Ukraine-Russia war. All this showed that our economy’s
sustainable structure remained intact despite the February
earthquakes,” he added.
According to leading indicators, exports climbed to $123.4 billion
in the first six months, while travel revenues stood at a record
high of $43.9 billion, Yılmaz said. “We are expecting record growth
numbers in the upcoming period.”
Bringing down inflation back to single digits will be the
government’s priority in the period ahead, he reiterated.
Yılmaz, however, cautioned against the risks to the current account
deficit, but voiced optimism that the outlook will improve in the
second half of the year. The current account deficit this year will
probably be higher than the gap forecast in the government’s
medium-term program, said Yılmaz, citing gold imports and
imported energy bill as the largest items contributing to the deficit.
The program initially forecast that the current account deficit would
be 2.5 percent of GDP this year.
“The rolling 12-month gold imports amounted to $29.4 billion and
energy imports stood at $72.1 billion. Excluding energy and gold,
Türkiye posted a current account surplus of $41.5 billion.”
October 2023 50

Munich car
show highlights
China’s lead in
electric car race
European carmakers must demonstrate
their capability to compete with China’s
lead in developing cheaper, more
consumer-friendly electric vehicles (EVs),
industry analysts and executives noted at
Munich’s International Motor Show – IAA
mobility show.
“It must be a battle, they (Chinese EV
makers) are very competitive in the electric
car value chain,” Renault CEO Luca de Meo
told RTL Radio, speaking from the car show.
“I think they’re a generation ahead of us.”
“We need to catch up very quickly,” he
added.
Chinese EV makers, including BYD, Nio, and
Xpeng, are all targeting Europe’s EV market,
where sales soared nearly 55% to about
820,000 vehicles in the first seven months
of 2023, making up about 13% of all car
sales.
According to auto consultancy Inovev, 8%
of new EVs sold in Europe this year were
made by Chinese brands, up from 6% last
year and 4% in 2021.
The Chinese presence is also being felt
at the Munich auto show. About 41%
of exhibitors at this year’s event are
headquartered in Asia, with double the
number of Chinese companies attending,
including EV makers BYD and Xpeng and
battery maker CATL.
“What used to be a performance for the
German car industry to demonstrate
its powerful position is now a meeting
of equals between progressive players
from around the world, especially China,”
said Fabian Brandt of consultancy Oliver
Wyman.
The arrival of Chinese EV makers has raised
concerns they will undercut local carmakers
and come to dominate EV sales.
The average price of an EV in China was
less than 32,000 euros ($35,000) in the first
half of 2022 compared with around 56,000
euros in Europe, according to researchers
at Jato Dynamics.
“Europe needs to stop being naive from a
macroeconomic point of view in the face of
China,” Renault’s engineering head, Gilles
Le Borgne, told journalists, pointing to the
country’s control of the full battery supply
chain. Chinese and German carmakers and
suppliers will also speak at a Chinese EV
conference to be held outside China for the
first time as part of the IAA.
Competition over price will be a key theme
at the conference, with Tesla showcasing its
upgraded Model 3 to go on sale in Europe
in October at 42,990 euros ($46,400).
Mercedes-Benz will present its CLA
compact class and BMW its Neue Klasse,
both of which target higher range and
efficiency while halving production costs.
Volkswagen unveiled a show car for its
CUPRA brand and outlined a new designoriented
approach for the company, with
chief designers working more closely
with its 10 brand CEOs for stronger
differentiation.
Mercedes CEO Ola Kaellenius told
journalists it was not “unusual for new
players to come in” at a time when the
industry was undergoing such a huge
transformation.
“There’s nothing else you can do but focus
on your customer,” Kaellenius said.
About 41% of exhibitors at this year’s
event are headquartered in Asia, with the
number of Chinese companies having more
than doubled, including players across
batteries and EV production such as BYD,
CATL and XPeng.
“Europe needs to stop being naive from
a macroeconomic point of view in the
face of China,” Gilles Le Borgne, Renault’s
engineering head, told journalists, pointing
to the country’s control of the entire
battery supply chain.
Chinese and German players, including
top German carmakers and suppliers and
China’s LeapMotors and Horizon Robotics,
will also speak at a Chinese EV conference
set for the first time outside China as part
of the IAA. Competition over price will be
a key theme at the conference, with Tesla
showcasing its upgraded Model 3 to go on
sale in Europe in October at 42,990 euros
($46,400). Mercedes-Benz will present
its CLA compact class and BMW its Neue
Klasse, both of which target higher range
and efficiency on a halving of production
costs. Volkswagen unveiled a show car
for its CUPRA brand and outlined a new
design-oriented approach for the company,
with chief designers working more closely
with its 10 brand CEOs for stronger
differentiation.
“What used to be a performance for the
German car industry to demonstrate its
extremely strong position is now a meeting
of equals between progressive players
from around the world, especially China,”
said Fabian Brandt of consultancy Oliver
Wyman.
October 2023 52

Türkiye pledges
greater support
for exporters
in 2024
Trade Minister Ömer Bolat said that Türkiye
would continue to support exporters,
stressing that the government’s efforts to
increase financing in the 2024 budget “are
endless.”
Highlighting the significant initiative of
opening loans for exporters through
Türk Eximbank during their tenure, Bolat
emphasized that this move had farreaching
effects. Notably, private banks
responded by swiftly lowering the loan
interest rates from 48% to 25% overnight,
immediately benefiting exporters.
Bolat elaborated on the concept of
the multiplier effect, showcasing this
development as a prime illustration of how
a single strategic action can yield positive
cascading results.
“Furthermore, the central bank took
pivotal steps to empower exporters
by increasing their rediscount credits
fivefold. This strategy, while maintaining
a deliberate reduction in loan volumes to
alleviate demand pressures and combat
inflation concerning domestic demand, has
proven effective,” said the minister.
“The daily limit has been expanded
substantially, surging from TL 300 million
($11 million) to TL 1.5 billion. Out of this
sum, TL 1 billion is allocated through
Eximbank, with an additional TL 500 million
accessible via various banks.”
Bolat said they were “steadfastly
committed to extending our unwavering
support to the export sector, an endeavor
that remains boundless.”
“Looking forward to the 2024 budget, we
are firmly dedicated to augmenting export
support in an unceasing pursuit,” he noted.
Bolat’s remarks came at the Istanbul
Fashion Connection (IFCO) apparel and
fashion fair in Istanbul, during which he
said Türkiye’s monthly exports have risen
from around $1 billion a year to now about
$1 billion every single day.
Türkiye’s exports last year totaled $254
billion, he said, adding that textile and
apparel sector exports amounted to $32
billion.
The mention of Turkish goods is like
mentioning a world brand, he stressed.
Touching on the fair, he said the event
hosts 30,000 visitors and 94 foreign buying
delegates from 26 countries.
He underlined that Türkiye is the thirdlargest
country in Europe in the textile and
apparel sector and seventh in the world.
In Europe, Türkiye is the fourth-largest
glass exporter, third in the white goods
(home appliances) sector, and first in the
agriculture sector, he said.
Türkiye is also the largest carpet exporter in
the world, he added.
The country aims to reach a $400 billion
level in goods exports and $200 billion in
services exports by 2028, Bolat said.
October 2023 54

Turkish navy ranks 10th among world’s
strongest navies listing
The World Directory of Modern Military
Warships (WDMMW) ranked Türkiye’s navy
10th in the most recent global assessment
to determine the strongest navies across 36
nations.
The evaluation criteria included the
number of warships and submarines, as
well as aspects such as fleet age, logistical
support, and offensive and defensive
capabilities.
Furthermore, the ranking considered the
overall balance of each navy, analyzing
the variety of asset types they possessed
and whether they focused their resources
in specific areas. The assessment
encompassed most ships while excluding
smaller craft, survey ships, and historical
ceremonial vessels.
The ranking also made distinctions
between various classes of combat ships,
encompassing both relatively compact
corvettes and frigates and larger destroyers
and cruisers.
Each navy was given a final “True Value
Rating” to measure them against one
another.
According to the WDMMW report,
Türkiye – which ranked 10th has most
recently conducted a global assessment
to determine the strongest navies across
36 nations which had a fleet comprising
90 active units as of April, which included
one helicopter carrier, 12 submarines,
16 frigates, 10 corvettes, 11 mine/
countermine warships, 35 offshore-patrol
vessels, and five amphibious-assault
vessels.
Türkiye’s navy did not possess any
destroyers or cruisers.
The country’s strategic significance lies
in its control of the maritime chokepoint
connecting the Mediterranean and the
Black Sea.
The WDMMW assessment indicated that
October 2023 56

the average age of the Turkish navy was
18.8 years, and its overall force balance
was considered to be “average.”
Based on the True Value Rating, Türkiye
scored 80.5 in the evaluation.
Among the country’s neighbors, Greece
ranked 22nd on the listing.
The country has 11 submarines, three
frigates, three mine/countermine warfare
ships, and 36 offshore-patrol vessels,
making up its 63 active units as of
November, according to the WDMMW.
It said that Greece was focused on offshore
vessels and that the fleet represented
“over half of all fighting strength.” The
WDMMW described the rest of Greece’s
fleet as “an aging fleet of submarines and
frigates for the most part.”
Greece has no destroyers, corvettes,
cruisers, or amphibious-assault vessels and
the navy’s force balance was “fair” while its
median hull age was 27.5 years.
The report gave Greece’s navy a True Value
Rating of 47.2.
Egypt, a coastal neighbor of Türkiye on the
Eastern Mediterranean ranked closer to the
country as it became the 13th country with
the strongest navy.
The WDMMW said Egypt’s navy is the
largest such force in Africa or the Middle
East with 107 active units as of November.
Its navy includes eight submarines,
12 frigates, seven corvettes, 18 mine/
countermine warfare ships, 48 offshorepatrol
vessels, and 12 amphibious-assault
vessels.
It also has two helicopter carriers, which
the WDMMW said made it “the only
African/Middle East power to have aircraft
carriers in the force.”
It has no destroyers or cruisers and only
has one vessel in production.
Yet, the country has an aging fleet. The
WDMMW said that Egypt’s force balance
was “average” and that its median hull age
is 27.5 years, with the navy acquiring a True
Value Rating of 72.4.
According to the WDMMW report, the
top ten countries with the most powerful
navies worldwide are the United States,
China, Russia, Indonesia, South Korea,
Japan, India, France, the U.K., and Türkiye,
respectively.
The report pointed out that, Russia,
among the top three, had a lot of aging
units, including its only aircraft carrier, the
Admiral Kuznetsov.
Many of its 58 submarines, 12 destroyers,
and four cruisers are also showing their
age. The report said Russia’s median hull
age was 30 years.
The report highlighted Russia’s efforts
to enhance its naval capabilities through
a modernization initiative, involving the
procurement of 82 new units. Notably,
the country demonstrated significant
dedication to acquiring advanced
corvette warships, submarines, and mine/
countermine warfare vessels. According to
the WDMMW evaluation, Russia received a
high True Value Rating of 242.3, indicating
its substantial naval strength. Furthermore,
the assessment categorized Russia’s force
balance as “good,” reflecting a wellbalanced
and formidable navy.
During Russia’s invasion of Ukraine, its
military suffered notable equipment losses,
but its navy remained relatively unscathed
as it did not play a significant role in the
conflict. One significant setback for Russia
was the destruction of its flagship in the
Black Sea, the Moskva, which was targeted
and taken out by a Ukrainian missile strike.
For the U.S. Navy, the WDMMW gave it
a True Value Rating of 323.9, its highest
score. It said the U.S. scored highly because
it “features a broad mix of warship and
submarine types as well as balance
strengthened by overall numbers (quantity)
– pulling ahead by its vaunted carrier fleet.”
The listing said the U.S. Navy had 243
active units in November, comprising 11
aircraft carriers, 68 submarines, 22 cruisers,
70 destroyers, 21 corvettes, eight mine/
countermine warfare ships, 10 offshorepatrol
vessels, and 33 amphibious-assault
vessels. It has no frigates, and its median
hull age is 23.3 years. It said the U.S. had a
“good” balance in its asset types.
October
2023
58

BRD extends fresh $109M loan
tailored for Türkiye quake region
Europe’s development bank said it was providing a $109 million
loan to the largest private lender in Türkiye for on-lending to
businesses and individuals affected by the devastating earthquakes
that struck the country’s southeastern region.
The loan to Işbank is part of the European Bank for Reconstruction
and Development’s (EBRD) Türkiye Disaster Response Framework,
launched in the aftermath of the earthquakes in early February that
killed over 50,000 people.
The disaster toppled hundreds of thousands of buildings, left
millions homeless and severely damaged the southeastern region’s
infrastructure. Business groups, economists and the government
have said rebuilding could cost more than $100 billion.
The EBRD said proceeds of the loan will be used to remedy some
of the damage to the region’s economy and seek to preserve the
livelihoods and human capital of the affected cities.
“By providing financial support to businesses and individuals, the
loan aims to address the most immediate funding needs of the
local population in those cities, bringing financial relief to the
region’s private sector,” the lender said in a statement.
The EBRD previously announced a 1.5 billion-euro ($1.65-billion),
two-year investment plan for the region, to lessen the economic
impact of the disaster.
Arthur Poghosyan, EBRD deputy head of Türkiye Financial
Institutions, said their rapid progress in transactions under the
Türkiye Disaster Response Framework is vital for the recovery and
reconstruction of the region.
“We are confident that as our long-standing partner, Işbank, will
disburse these funds efficiently and successfully to those in need
of financial relief while they are recovering their economic wellbeing,”
Poghosyan noted.
The 600-million-euro Türkiye Disaster Response Framework, the
first such framework deployed in the EBRD regions, aims to provide
support for companies and individuals affected by the disaster.
It also seeks to offer new lending for companies participating in
recovery and reconstruction efforts in the area, strengthening the
private sector’s role in disaster response.
Close to $350 million has been allocated to the EBRD’s partner
banks under this framework to date, including the loan to Işbank.
Işbank Deputy Chief Executive Gamze Yalçın said the loan
agreement carries great importance in terms of supporting the
quake-hit region.
“The EBRD’s invaluable support for the Turkish economy and the
affected region under the DRF is highly appreciated. Işbank Group,
with its own inclusive TL 10 billion disaster package, will also
continue to support the region with this new initiative,” said Yalçın.
To date, the EBRD has invested more than 18 billion euros in
various sectors of the Turkish economy, largely in the private sector.
October 2023 62

Turkish finance
minister meets
dozens of int’l
investors in
Istanbul
Treasury and Finance Minister Mehmet
Şimşek met with dozens of international
investors and pledged to continue hiking
interest rates, even as economic growth
slows.
The eight-hour meeting in Istanbul included
Finance Minister Mehmet Simsek and
Central Bank Governor Hafize Gaye Erkan
and 40 investors discussing monetary and
fiscal policy and the economic outlook.
The meeting marks a more transparent
market turn by the authorities. It comes
two months after President Tayyip Erdoğan
named Şimşek, who is highly regarded
by financial markets, as well as Erkan, a
former senior U.S.-based bank executive,
in moves seen as heralding a switch to
tighter interest rate policy. According to
the sources, Şimşek stressed that reducing
inflation was the priority and struck a
confident tone that policy was returning to
more normal settings.
He told investors that Erdoğan fully
supported the monetary tightening and
that “gradual” rate hikes would continue,
pinching credit and leading to somewhat
slower economic growth but not a sudden
stop, one of the sources said.
The central bank under Erkan has raised its
key rate by 900 basis points to 17.5% since
June, though the pace of tightening missed
market expectations. It more than doubled
its year-end inflation forecast to 58%,
meeting expectations.
Under the previous governor, the bank had
slashed rates to 8.5% from 19% in 2021, in
line with Erdoğan’s unorthodox belief that
high rates fuel inflation. That sparked a
currency crisis and the lira weakened 44%
in 2021, 30% in 2022, and another 30% so
far this year. Inflation touched a 24-year
peak of 85.5% last October. It eased but
rose sharply again in July to nearly 48%.
The meeting was hosted by Wall Street
bank JPMorgan, with the participation of
Vice President Cevdet Yilmaz, Ziraat Bank
CEO and Turkish Banking Association head
Alpaslan Cakar and the heads of Türkiye’s
wealth fund and treasury debt office were
also scheduled to speak; the program
showed.
October 2023 64

Turkish defense firms listed among world’s top 100
Four Turkish defense magnates made it to
the top 100 defense firms list published by
the U.S.-based Defense News Magazine.
Türkiye’s Aselsan was at 47th place in the
annual ranking, up from 49th last year,
said the outlet that describes itself as “the
authoritative, independent, professional
news source for the world’s defense
decision-makers.”
Turkish Aerospace Industry (TAI) was at
58, up from 67, while missile producer
Roketsan climbed to 80th place from 86th.
The Military Factory and Shipyard
Management Inc. (Asfat) also entered the
list for the first time and took the 100th
spot.
Aselsan’s defense revenues totaled $2
billion in 2022, while TAI’s revenues
amounted to $1.48 billion, Roketsan’s
$873.3 million, and Asfat’s $443.5 million.
Lockheed Martin was in first place again
with defense revenues of $63.3 billion on
the list, followed by RTX with $39.6 billion,
and Northrop Grumman with $32.4 billion.
While the top three firms were from the
U.S., six out of the top 10 were U.S.-based,
three from China, and one from the U.K.
New period of dialogue on trade begins with EU
A new period of dialogue has begun between Türkiye and the
European Union on trade, the Trade Ministry has said, following
a virtual meeting with Trade Minister Ömer Bolat and Valdis
Dombrovskis, the vice president of the European Commission.
“During the meeting, we agreed on a common roadmap for the
development of commercial and economic relations between
Türkiye and the EU in the new period,” Bolat wrote on social media.
The EU is Türkiye’s largest trading partner.
The bilateral trade volume reached a record $200 billion last year.
The bloc absorbed more than 40 percent of Türkiye’s exports in the
first seven months of 2023, with shipments to the EU amounting to
$60.54 billion, according to the latest data from the Trade Ministry.
“Within the scope of the Trade Working Group between Türkiye
and the EU, we will discuss our current technical issues and
cooperation opportunities before the start of negotiations for the
modernization of the Customs Union, and then we will be in close
contact for a strong dialogue in all areas of our trade,” Bolat said.
Bolat and Dombrovskis also agreed to further meetings in Brussels
in September, according to the statement from the Trade Ministry.
“A constructive first discussion with the Trade Minister Bolat
on how to re-invigorate our cooperation and EU-Türkiye trade
relations,” wrote Dombrovskis on a social media post. The two also
discussed the global challenges of food security and the need to
continue the Black Sea Grain Initiative, said the EU official.
October 2023 66

Türkiye aims to reach $400B level in goods
exports and $200B in services exports
The mention of Turkish goods is like
mentioning a world brand, the Turkish
trade minister said.
Speaking at the Istanbul Fashion
Connection (IFCO) apparel and fashion
fair in Istanbul, Omer Bolat said Türkiye’s
monthly exports have risen from around $1
billion a year to now about $1 billion every
single day.
Türkiye’s exports last year totaled $254
billion, he said, adding that textile and
apparel sector exports amounted to $32
billion.
Touching on the fair, he said the event
is hosting 30,000 visitors and 94 foreign
buying delegates from 26 countries.
He underlined that Türkiye is the thirdlargest
country in Europe in the textile and
apparel sector, and seventh in the world.
In Europe, Türkiye is the fourth-largest
glass exporter, third in the white goods
(home appliances) sector, and first in the
agriculture sector, he said.
Türkiye is also the largest carpet exporter in
the world, he added.
The country aims to reach $400 billion
level in goods exports and $200 billion in
services exports by 2028, Bolat said.
October 2023 68

China reports
biggest drop in
exports since
2020
China suffered its biggest drop in exports
for more than two years, according to
official figures, as the world’s secondlargest
economy struggles with sluggish
global demand and a domestic slowdown.
The data will likely ramp up calls for leaders
to do more to revive growth, having laid
out a series of stimulus measures.
Sales of Chinese products to foreign
markets plunged 14.5 percent on-year, a
third consecutive drop, according to the
customs authority.
The decline was bigger than expected and
the heaviest since a 17.2 percent drop in
January-February 2020, when the economy
came to a standstill in the early weeks of
the COVIC-19 pandemic.
Apart from a brief rebound in March and
April, exports have been in constant decline
since October. The threat of recession in
the United States and Europe, combined
with high inflation, has contributed to
weakening international demand for
Chinese products in recent months.
Exports dived 12.4 percent on-year in June.
Shipments to the European Union in the
first seven months of the year came to
2.08 trillion yuan ($288.9 billion), down
2.6 percent, Meanwhile, imports fell for
the ninth month in a row in July, shrinking
12.4 percent in a sign of sluggish domestic
demand.
The trade figures are the latest indicators
that China’s post-COVID recovery has run
out of steam. The economy grew just 0.8
percent on-quarter in April-June, while
youth unemployment has reached record
highs of more than 20 percent.
July’s official manufacturing purchasing
managers’ index -- a key measure of factory
output -- came in at 49.3, below the
50-point mark that separates expansion
and contraction. And the property sector
remains in turmoil, with major developers
failing to complete housing projects,
triggering protests and mortgage boycotts
from homebuyers. The country’s top
leaders, known as the Politburo, have
warned that the economy faces “new
difficulties and challenges” as well as
“hidden dangers in key areas”.
October 2023 70

China tags Türkiye safe for post-pandemic tourism
Beijing lifted a COVID-19 era ban on
outbound group tours to dozens of
countries including Türkiye, the United
States and Japan, a move that could
see crowds of Chinese tourists return to
destinations around the world.
China cut itself off from the world in 2020
as part of a strict zero COVID-19 strategy,
using visa suspensions and lengthy
quarantines to curb the import of virus
cases into the country.
The announcement is the latest move
towards reopening, after the Chinese
government dropped its containment
measures abruptly in December.
“From now on, travel agencies across the
country and online travel companies will
resume operating outbound group tours”
to more than 70 countries, including
Türkiye, the United States, United Kingdom,
Japan and South Korea, the Chinese
Ministry of Culture and Tourism said in a
statement.
Among numerous others, the list also gave
the green light for trips to most European
Union member states, India, Pakistan,
and Australia. The inclusion of Australia
coincides with a thawing in the frostiness
between Canberra and Beijing that has
dominated relations over the last few
years. China announced it was removing
extra tariffs on Australian barley imposed in
2020 at the height of a bitter dispute with
the then-conservative government over
issues including China’s overseas influence
operations. Chinese tour groups had
already received permission to visit a small
number of countries earlier this year under
a trial program, including tourist magnets
Thailand, Italy and France.
The tourism ministry said outbound
tourism had been developing in a stable
manner since the start of the trial period,
“playing a positive role in promoting
tourism exchanges and cooperation”.
China had the largest outbound tourism
market in the world in 2019, with mainland
Chinese residents taking 155 million trips
abroad that year, according to consulting
firm McKinsey.
That outflow narrowed to a trickle in the
past three years as Chinese authorities
restricted passport renewals and cut
international flights in a bid to deter travel.
“Currently, international passenger flights
continue to resume, and the desire
of Chinese people to travel abroad is
increasing,” the foreign ministry said in
a statement. In early December, Chinese
authorities effectively ended the country’s
regime of mass testing, lockdowns and long
quarantines – but the abrupt reversal led to
a spike in COVID-19 cases.
Beijing announced in late December that
inbound travelers to the country would no
longer need to quarantine from January
8, but kept in place visa restrictions on
foreigners. China resumed issuing a range
of visas to foreigners in March, but inbound
tourism remains at a fraction of prepandemic
levels.
October 2023 72

Türkiye’s tourist
arrivals, revenue
surge reaffirm
buoyant season
Foreign arrivals in Türkiye jumped by
nearly 20% in the first half of the year,
according to official data that also showed
tourism revenues surged by almost a third,
maintaining a strong trend in the industry
that is a vital economic source.
Nearly 19.62 million foreigners arrived
from January through June, Culture and
Tourism Minister Mehmet Nuri Ersoy said,
marking a 19.88% increase from some
16.37 million a year ago. Arrivals in June
alone jumped 11.35% year-over-year to
more than 5.58 million.
This year’s momentum has been driven by
an influx of holidaymakers from Europe,
particularly Germany and the United
Kingdom, besides arrivals from Russia,
mainly due to flight restrictions imposed by
Western nations over Moscow’s invasion of
Ukraine. The first-half figure reaches nearly
22.95 million when visitors from abroad
of Turkish origin are taken into account,
marking a 17.5% increase from some
19.53 million in 2022, Ersoy told a news
conference to announce the data.
Arrivals from Russia reached 2.61 million
in January-June, the Culture and Tourism
Ministry data showed, compared to nearly
1.46 million in the same period a year
ago. They were followed by 2.27 million
tourists from Germany and 1.49 million
from the U.K. About 1.3 million Bulgarians
and over 1 million Iranians visited Türkiye
in the first half. Tourism revenues surged
27% year-over-year to $21.7 billion in the
first six months, Ersoy said, noting a more
than 11% jump to almost $100 per capita
overnight income.
“The per capita overnight income, which
was $89.2 in the first six months of 2022,
was realized as $99.9 in the first six months
of 2023. In other words, there is an
increase of 11.9%,” the minister noted.
“Our income per person per night had
dropped to $62. Currently, Türkiye has
started to see $100s.”
Revenues in the second quarter jumped
23.1% year-over-year to $12.98 billion,
Turkish Statistical Institute (TurkStat) data
showed. Ersoy said the average length of
stay had decreased, driven mainly by the
intensive housing purchases by Russian
citizens and seasonal rental of these
residences to other tourists. He also cited
the recession challenges plaguing the world
and the contraction in purchasing power,
leading to hotel stays falling.
“The duration of stay decreased from
10.5 overnight stays to an average of 9.9
overnight stays. There is a contraction of
5.7%,” said the minister.
Ersoy also acknowledged occupancy rates in
hotels catering to high-income groups came
in below expectations in the first half of
the year. The devastating earthquakes that
struck southeastern Türkiye in early February
and the presidential and parliamentary
elections coincided with the early booking
period, said Ersoy.
“The fact that the cool weather extended
until mid-July causes last-minute bookings
to slip,” he added. Tourism revenue is critical
as President Recep Tayyip Erdoğan and his
government focus on reducing the current
account deficit to tackle stubborn inflation.
Last year’s complete rebound from the
pandemic fallout saw the number of tourists
near a record, generating all-time high
revenues and prompting the government to
raise its annual estimates.
The government sees foreign arrivals
reaching 60 million this year, which it
estimates will hit 90 million in 2028. For the
income, it sees it rising to $56 billion this
year and $100 billion five years from now.
Foreign visitors surged 80.33% to 44.6
million in 2022, just shy of the peak of 45.1
million in 2019. The figure is compared to
the 24.71 million arrivals in 2021 and 12.73
million in 2020. Income in 2022 climbed
53.4% to a record high of nearly $46.3 billion
as the lingering effects of the coronavirus
pandemic dissipated and Russian arrivals
rocketed after Moscow invaded Ukraine
on Feb. 24. Last year’s income blew past
the previous high of $38.4 billion in 2019
before the pandemic hit. The figure stood
at $30.2 billion in 2021 after the outbreak
more than halved it to just $14.8 billion in
2020. Tourism contributes about 10% to
Türkiye’s gross domestic product (GDP). In
addition, around 1.7 million people worked
in accommodation and food services in 2022
– about 5% of total employment.
October 2023 74

Türkiye ramps up financing by 10-fold to help boost exports
Türkiye’s central bank doubled the banks’
daily limit to extend rediscount credits to
support exporters’ access to financing,
in a move that officials say reflects the
government’s determination to prioritize
outbound shipments.
The government has been seeking ways
to curb the stubborn trade imbalance by
lowering dependence on imports and
boosting exports.
The Central Bank of the Republic of Türkiye
(CBRT) said it lifted banks’ daily limit to
extend rediscount credits to TL 3 billion
($111 million) from TL 1.5 billion.
In July, the authority decided to increase
the limit for extending these loans to TL 1.5
billion from TL 300 million.
“We have increased the daily credit limit to
our exporters by tenfold in a three-month
period,” said Treasury and Finance Minister
Mehmet Şimşek.
“This shows how serious we are about
prioritizing exports,” Şimşek wrote on
social media platform X, formerly known as
Twitter.
Türkiye needs to make more exportoriented
investments for a permanent
increase in prosperity, the minister
stressed. “By ensuring price stability in
the medium term, we will ensure that our
companies can access subordinated credit
in global markets.”
CBRT Governor Hafize Gaye Erkan echoed
Şimşek’s view.
“We prioritize access to financing for
our exporters who contribute to the
current account balance,” Erkan said in a
statement. We will continue to support
practices to increase the share of SMEs
(small- and medium-sized enterprises) in
rediscount loans.”
She emphasized the central bank’s
commitment to its roadmap, which
includes selective credit tightening
measures to expedite the establishment of
price stability.
Erkan cited a priority focus on ensuring
financial access for exporters contributing
to the country’s current account balance
during the transition to a lower inflation
rate.
“We are diligently implementing our
roadmap in conjunction with selective
credit tightening measures to achieve price
stability as quickly as possible. During the
transition to lower inflation, we prioritize
facilitating access to finance for exporters
who contribute to the current account
balance,” she said.
Official data showed Türkiye’s current
account swung back to a deficit in July after
a rare surplus a month earlier, propelled
mainly by the trade imbalance.
The current account registered a nearly
$5.5 billion shortfall versus a revised
surplus of $651 million in June. The figure
came in higher than market expectations.
The gap for the January-July period
reached $42.3 billion, nearly matching
the government’s year-end forecast of
$42.5 billion that was outlined in the new
medium-term program, unveiled.
The forecasts in the new economic
roadmap see the current account deficit
falling to around $34.7 billion, or 3.1% of
gross domestic product (GDP), in 2024,
down from about 4% projected for this
year.
Şimşek earlier said the shortfall is
expected to shrink to around $40 billion in
December due to a slowdown in consumer
loan growth and a sharp rise in tourism
revenues.Data revealed that the 12-month
rolling gap surged to $58.5 billion,
equivalent to approximately 6% of GDP,
according to economists’ calculations.
Türkiye’s foreign trade deficit shrank by
21.2% year-over-year to $8.9 billion in
August, according to official data. Exports
rose 1.6% to $21.6 billion, the best August
level ever, while imports dropped 6.3% to
$30.5 billion.
The January-August trade shortfall is still
12.1% higher than a year ago and reached
$82.4 billion. Outbound shipments in the
eight-month period slipped 0.4% to $164.9
billion. Imports rose 3.5% to $247.3 billion.
The increase in rediscount loan limits
should encourage new endeavors by
exporters, Trade Minister Ömer Bolat said.
Bolat said ensuring growth in exports is
the government’s biggest goal on its path
to a lower foreign trade gap and current
account deficit.
“Financing support provided to exporters
has been increased by tenfold in 1.5
months. We now also expect them
(exporters) to make new moves in exports
now,” the minister told an event in the
Aegean province of Izmir.
The decision will promote increased
production and exports without the burden
of financing constraints, said Turkish
Exporters Assembly Chair Mustafa Gültepe.
Gültepe highlighted that exporters have
faced difficulties accessing affordable
financing for an extended period. But he
said the new economic management has
taken significant steps to prioritize access
to financing for exporters.
“This starts a process where SMEs receive a
larger share of loans, and high-performing
exporters are prioritized,” Gültepe said in a
statement.
“Increasing rediscount loan limits allows us
to overcome a significant hurdle, enabling
our exporters to focus more on production
and exports without wasting time seeking
financing.”
October 2023 76

Electric car makers race for supplies of lithium for batteries
Threatened by possible shortages of lithium
for electric car batteries, automakers are
racing to lock in supplies of the onceobscure
“white gold” in a politically and
environmentally fraught competition from
China to Nevada to Chile.
General Motors and the parent company
of China’s BYD Auto went straight to the
source and bought stakes in lithium miners,
a rare step in an industry that relies on
outside vendors for copper and other raw
materials.
Others are investing in lithium refining or
ventures to recycle the silvery-white metal
from used batteries.
A shortfall in lithium supplies would be
an obstacle for government and industry
plans to ramp up sales to tens of millions of
electric vehicles a year.
It is fueling political conflict over resources
and complaints about the environmental
cost of extracting them.
Ford Motor has signed contracts stretching
up to 11 years into the future with lithium
suppliers on two continents. Volkswagen
and Honda are trying to reduce their need
for freshly mined ore by forming recycling
ventures.
Global lithium output is on track to triple
this decade, but sales of electric SUVs,
sports cars and sedans that rose 55 percent
last year threaten to outrun that.
Each battery requires about eight kilograms
of lithium, plus cobalt, nickel and other
metals.
Adding to uncertainty, lithium has emerged
as another conflict in strained U.S.-Chinese
relations.
Beijing, Washington and other
governments see metal supplies for
electric vehicles as a strategic issue and are
tightening controls on access.
Other governments including Indonesia,
Chile and Zimbabwe are trying to maximize
their return on deposits of lithium, cobalt
and nickel by requiring miners to invest in
refining and processing before they can
export.
GM is buying direct access to lithium by
investing $650 million in the Canadian
developer of a Nevada mine. In return, GM
says it will get enough for 1 million vehicles
a year.
BYD Auto’s parent company, battery maker
BYD Co., has announced more than $5
billion in investments in lithium mining and
refining over the past 18 months.
Despite rising output, the industry may face
shortages of lithium and cobalt as early as
2025 if enough isn’t invested in production,
according to Leonardo Paoli and Timur Gul
of the International Energy Agency.
“Supply side bottlenecks are becoming
a real challenge,” said Paoli and Gul in a
report last year.
Alastair Bedwell of GlobalData said miners
are reluctant to “go all out” on lithium until
they are sure the industry won’t switch to
batteries made with other metals.
Developing lithium sources is a yearslong
process.
Mines that came online in 2010-19 took on
average more than 16 years from discovery
to the start of production, according to
Paoli and Gul of the IEA.
“These long lead times raise questions
about the ability of supply to ramp up,”
they wrote.
Worldwide lithium resources are estimated
at 80 million tons by the U.S. Geological
Survey.
Bolivia’s are the biggest at 21 millions tons,
followed by Australia with 17 million and
Chile with 9 million. China has 4.5 million
tons of known reserves and the United
States has 1 million.
Forecasts of annual global production
range as high as 1.5 million tons by 2030.
But demand, if EV sales keep rising at
double-digit annual rates, is forecast to
increase to up to 3 million tons.
October 2023 78

Türkiye eager to
avoid recession
while fighting
inflation
Amid the ongoing battle against
stubborn inflation, Türkiye’s top economy
officials emphasized the necessity of
simultaneously maintaining production and
exports, which they say will be crucial in
preventing a potential slip into recession.
“While fighting inflation we are making an
effort to sustain production and exports
so as not to fall into recession. We must
do both at the same time,” Vice President
Cevdet Yılmaz told reporters after meeting
bankers in Istanbul.
Further underscoring the government’s
determination, Treasury and Finance
Minister Mehmet Şimşek stressed
consolidation of macro-financial stability
as the administration’s top priority in the
coming period.
Şimşek added that they are moving toward
a rationalization in monetary policy for this
purpose.
“For sustainable high growth, investment,
employment, production and export cycles
must be prioritized. We are extremely
committed to this issue,” he told an event
in the southeastern Batman province.
“Our tax, credit, and incentive policies will
be shaped accordingly,” Şimşek affirmed.
Since the May elections, President
Recep Tayyip Erdoğan’s government
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.
Erdoğan said after a Cabinet meeting that
the government would lower inflation to
single digits but will not sacrifice economic
growth and employment, comments which
were echoed by Yılmaz.
The vice president stressed Türkiye must
sustain its push on production and exports
to prevent the economy from falling into
recession even as it fights inflation.
“We need to follow the right policies with
patience,” Yılmaz said.
The central bank doubled its year-end
inflation forecast to 58% and vowed to
continue gradual monetary tightening. The
end-2024 inflation prediction has been
raised to 33% from 8.8%. The forecast for
the end of 2025 stands at 15%.
Şimşek said Türkiye aims to lower soaring
inflation permanently after a transitional
period where prices remain high.
“As you can see from the central bank’s
projections, inflation will continue to rise
temporarily due to certain factors in the
coming months,” the minister said.
In the meeting with the finance sector,
the issue of new financial instruments
came onto the agenda with sector
representatives having spoken of
difficulties in financing long-term projects
given the short-term deposits in the sector,
Yılmaz said.
He also underscored that the meeting also
addressed the issue of encouraging firsttime
house buyers, adding that the central
bank and regulator were working on the
issue and that the housing supply needed
to be increased.
Yılmaz said the government’s new
medium-term program (MTP), setting
out its economic plans in detail, would be
announced in the first half of September.
Şimşek said the MTP will feature key
structural reforms and will serve as a
“crucial” guide and road map for both the
private and public sectors.
He further stated that Türkiye’s budgetary
balances were being shaped according
to specified criteria. Simultaneously, he
said fiscal discipline was reinstated and
stressed efforts to drive inflation down
to single digits through monetary policy
adjustments.
October 2023 80

China’s army
media hails
progress of
Turkish defense
industry
The official news outlet of China’s Peoples’
Liberation Army (PLA) has praised the
rapid advancement of the Turkish defense
industry, in particular Turkish drone
magnate Baykar, highlighting how it surged
ahead using indigenous resources.
In a full-page story, the PLA Daily covered
the Istanbul-based Baykar’s milestones,
which inked the largest export deal in
Türkiye’s history with Saudi Arabia, which
has reverberated globally.
It noted that Türkiye boasted powerful
defensive capabilities in the past but that
its dependence on foreign arms and other
hardware had increased after World War II.
The new model of unmanned warfare
that emerged in the 1990s opened new
opportunities in the defense field, it added.
As one of the defense companies
established in Türkiye during this period,
Baykar made significant strides in the
development of unmanned flight systems
despite its short history of 20 years.
Türkiye announced a plan to develop
domestic UAV systems in the 2000s and
encouraged private enterprises to work in
the field, the PLA Daily said.
This call was heeded by Baykar’s founder
and aviation enthusiast Özdemir Bayraktar,
who, seeking to contribute to the Turkish
industry, raised his son, Selçuk, to lead
Baykar’s technology research.
Selçuk Bayraktar graduated from Istanbul
Technical University and was educated in
the field of UAV technologies in the United
States, the story said, adding that he
completed his Ph.D. at the Massachusetts
Institute of Technology in 2007.
Highlighting his accomplishment of
assembling a youthful team of thousands
of engineers and experts spanning
13 distinct fields at Baykar, the story
emphasized that the armed UAVs
developed by Baykar have significantly
bolstered Türkiye’s counterterrorism
endeavors.
Pointing to the performance of the
Bayraktar TB-2 during recent conflicts
as a UAV used for both reconnaissance
and attack, the report highlighted that
the drone proved to be not only effective
October 2023 82

against tanks but also posed a significant
challenge to conventional air systems.
Baykar later upgraded the TB-2 and
developed the Akinci unmanned combat
aerial vehicle (UCAV), rooted in the
principles of simplicity, user-friendliness
and robustness, spanning from design
and production to flight control. This
endeavor has led to the emergence of
one of the premier heavy UAVs on the
market, boasting a wingspan of up to 20
meters (over 65 feet) and a takeoff weight
exceeding 5 tons, the article highlighted.
Referencing Türkiye’s recently launched
warship, the TCG Anadolu, the article noted
that Baykar is also conducting tests of its
new unmanned fighter jet, Kızılelma, which
holds the distinction of being the only such
aircraft capable of carrier-based landings
on a warship.
The article also underscored the significant
role played by Baykar’s UAVs in the
aftermath of the earthquakes that struck
Türkiye in February 2023.
Operating for over 1,500 hours over the
disaster zone, the UAVs diligently relayed
up-to-date data to rescue teams, aiding
in damage assessment and facilitating
the coordination of search and rescue
operations, the report further stated.
Pointing out that Baykar’s UAVs, which
have shown superior performance on and
off the battlefield, have experienced a
sales boom in recent years, the article said
the drones have been sold to nearly 20
countries.
October 2023 84

World Bank grants $1 bln for
Türkiye’s post-quake recovery
The World Bank has allocated a substantial
sum of $1 billion to aid the recovery
efforts in earthquake-affected provinces in
Türkiye’s south, Environment, Urbanization
and Climate Change Minister Mehmet
Özhaseki has announced.
Özhaseki noted that this loan would play
a pivotal role in advancing reconstruction
initiatives in the earthquake-stricken
region. A substantial portion of the loan
package amounting to $684.8 million has
been allocated to the ministry. Özhaseki
outlined the distribution of these funds,
stating that “$296.5 million [of this]
will be directed towards the ministry’s
housing projects in rural areas within the
earthquake zone, while $388.3 million
will be channeled into [ministry-owned]
İlbank’s infrastructure projects in the
earthquake-affected area.”
Furthermore, the minister detailed
how the loan earmarked for rural areas
will be utilized to restore essential
infrastructure and social facilities in the
villages. This includes the renewal of
water and rainwater networks, solid waste
management facilities, municipal fire
stations, as well as damaged emergency
response and municipal equipment.
Additionally, fire and rescue vehicles
and solid waste collection vehicles in the
earthquake region will also be upgraded
and renewed.
The announcement followed a prior
World Bank project aimed at preventing
the closure of viable micro, small and
medium enterprises (MSMEs) impacted
by the economic shocks resulting from the
earthquakes.
This project, with a budget of $450
million, seeks to ensure the continuity and
sustainable growth of these enterprises in
the 11 provinces affected by the quakes.
Under the guarantee of the Treasury and
Finance Ministry, the Small and Medium
Enterprises Development Organization of
Türkiye (KOSGEB) implements this project
to alleviate liquidity pressures on MSMEs,
enabling them to resume their operations
and gradually restore employment levels to
those seen before the earthquakes.
The project offers reimbursable financing
to eligible MSMEs to cover their operating
expenses, with 10 percent of the total
funds earmarked to support womenowned
or led MSMEs, emphasizing
inclusivity in the recovery process.
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