June 2024

Economic & business news from Türkiye

Turkish economy records 5.7% growth in Q1 2024

The Turkish Statistical Institute (TUIK) has just published growth figures for the first quarter of 2024 for Turkey. The country recorded a significant economic performance of 5.7%. The GDP estimate by production method increased by 90% in Q1 2024 compared to the same quarter of the previous year, reaching TRY 8,822 billion or USD 285 billion. The construction sector was one of the main drivers of this growth, with a notable performance of 11.1%. Other sectors that contributed to this growth are:

- Information and communication activities: 5.5%

- Professional, administrative and support services activities: 5.0%

- Industry: 4.9%

- Agriculture: 4.6%

- Services: 4.3%

- Public administration, education, human health and social services activities: 3.3%

- Other service activities: 2.8%

- Real estate: 2.5%

- Finance and insurance activities: 2.0%

Household final consumption expenditure also played an important role in this growth, contributing 7.3%. Exports of goods and services increased by 4.0% while imports decreased by 3.1% compared to the same quarter of the previous year.

Source: TRT Haber, May 31, 2024

Hydrogen technologies: Bosch invests heavily

Bosch Türkiye is preparing the city of Bursa to become the global production and R&D center for hydrogen technologies. Indeed, the German firm has claimed to have plans for mass production of hydrogen injectors for commercial vehicles from 2026. Bosch also plans to double its workforce in Bursa and will focus on advanced technologies such as electromobility and hydrogen engines. In addition to production, the company also provides design and engineering support for hydrogen engine projects of automobile manufacturers in Turkey.

Bosch's R&D efforts in Bursa encompass the #development of innovative prototypes and components for engines and hydrogen storage systems. These massive investments aim to make Turkey a leader in this ecological technology says Daniel Korioth, president of Bosch Turkey and Middle East. Additionally, Bosch is investing in training Turkey's future skilled workforce through various educational programs. The company launched the Bosch Yetenek Akademisi in Bursa to provide training in automation, artificial intelligence AI and hydrogen technologies. Bosch also collaborates with Turkish universities to train competent engineers, helping to strengthen Turkey's technology ecosystem.

Bosch Turkey's 2023 results are very positive with a 31% increase in its consolidated group sales in euros, largely driven by demand from young Turkish consumers and anticipation of purchases due to inflation.

Source: Dünya, May 29, 2024

Türkiye: Ford leads exports

The Assembly of Exporters of Turkey has published the list of the largest exporting companies for 2023: the car manufacturer Ford Otomotiv tops this ranking. The American manufacturer is followed by Toyota Otomotiv which ranks second, followed by the refiner STAR Rafineri. Türkiye Petrol Rafineleri (oil refining) and Kibar Dış Ticaret (specializing in international trade) ranked fourth and fifth, respectively, while drone manufacturer Baykar Technologies placed tenth.

In the services export category, Turkish Airlines won first place, followed by low-cost carrier Pegasus. Güneş Express, operating under the name SunExpress, ranked third, and Istanbul Airport operator İGA ranked fourth. Trendyol was the largest electronics export company, followed by ready-to-wear brand LC Waikiki and Modanisa brand specializing in modest fashion online. Turkey's exports of goods and services amounted to USD 255.4 billion and USD 101.7 billion respectively in 2023, despite a contraction in global trade of USD 1.1 trillion. Turkey's share in global trade increased to 1.08%, while its share in services exports was 1.29% last year. Turkey has set a target of generating USD 375 billion in merchandise exports and USD 200 billion in services exports by 2028.

Source: Hürriyet Daily News, June 9, 2024

Italian AMA Group acquires Turkish Star Zirai

The AMA Spa Group, an Italian company active in the production of components for agricultural machinery, has acquired 60% of the Turkish company Star Zirai. The Turkish company, headquartered in Güzelyurt, south of İzmir, specializes in the production of clod crushing discs, seed drill discs and other components for soil treatment. It has a team of 35 employees and has a factory of more than 2700 m2.

With this acquisition, the AMA group doubles its weight on the Turkish market, alongside its subsidiary AMA Türkiye. This transaction aims to improve competitiveness in the Italian market, increase its production capacity and enable greater penetration of the Middle East market. After finalization of the acquisition, the Turkish company will be renamed AMA Star Zirai.

Source: AMA Group, June 2024

Decathlon’s success story in Türkiye

Decathlon, present in 70 countries with 1,749 stores and 101,000 employees, aims to encourage sports practice for all based on each person's talents and aspirations.

It is in this context that Decathlon Türkiye organized the project "Türkiye'nin En Hızlısı" ("The Fastest in Turkey"), supported by the Athletics Federation of Turkey, which aims to promote sports culture and discover new talents among young people. The objective is to reach 2 million children aged 10 to 14 through competitions organized in 79 departments. Since qualifying began in May, 1.25 million children have already participated. The regional finals were held in Gaziantep, bringing together 1,350 children from various cities, with the best young athletes preparing for the national finals on June 13. The top five female athletes and top five male athletes in each category, along with their physical education teachers, will win a four-day trip to France in August.

Beginning its activities on Turkish soil in 2006, Decathlon Türkiye has firmly established itself and today has 47 stores and 2,200 employees. In 2023, Turkey became the company's third fastest-growing market globally, reaching 77 billion TL in revenue and selling more than 34 million products.

The success of the French brand also lies in its subcontracting strategy; in fact 21.4% of products sold on the Turkish market are manufactured locally, directly supporting the national economy. In addition, part of these products is exported to other countries. Last year, Decathlon managed to reduce the environmental footprint of its products by 39%, demonstrating its commitment to sustainability.

Source: Dünya, May 30, 2024

TOGG produces 20 electric vehicles in 1 hour

Turkey is banking on its first major electric car manufacturer, TOGG, to put the country at the helm of the global automobile industry. The project represents an important milestone in the Turkish automotive industry and symbolizes the country's ambition to become a leading player in the global electric vehicle market. At the factory located in Gemlik on the Sea of ​​Marmara, TOGG produces 20 vehicles in one hour. Last year, 20,000 vehicles left the factory, a significant figure compared to Tesla which produced 2,000 in the first year. The batteries, manufactured in partnership with the Chinese Farasis Energy, are assembled in a neighboring building. The factory, which employs highly qualified workers, is made up of 40% women.

The government supported the project by allocating factory land free of charge and committing to purchase 500 vehicles per year. Since its launch, the Togg T10X has absorbed nearly a third of electric car sales in Turkey, with 19,583 vehicles sold in 2023. Turkey's electric vehicle market is booming, with sales increasing ninefold in the year last, making the market larger than that of Italy and Spain.

In half a century, the Marmara region, around Istanbul, has become one of the main centers of the global automobile industry. Major car manufacturers, including Fiat and Renault, opened factories there in the early 1970s, followed by others such as Ford, Toyota and Hyundai, taking advantage of Turkey's position at the crossroads between Europe, Asia and the Middle East. Today, the Turkish automobile industry exports around 70% of its production to Western Europe. A vast network of 530 automotive subcontractors has been formed, employing more than 230,000 people. Most cars in the world have a part produced in Türkiye. For example, the horn for the first car in space, the Tesla Roadster, was supplied by a Turkish company.

Source: France 24, May 22, 2024

World Bank: financing of 18 billion USD

During the Development Day organized for the first time by the Industrial Development Bank of Turkey (TSKB), the World Bank Country Director for Turkey, Humberto Lopez, announced that USD 18 billion in additional financing will be allocated to Turkey, in addition to all the funds already in progress (currently 17 billion USD).

Humberto Lopez highlighted the progress Turkey has made over the past 20 years, with an average growth of 5.4%. Per capita income has quadrupled in 26 years and he stressed the importance of maintaining and improving these achievements in the decades to come. He highlighted three pillars for development: growth, social inclusiveness and sustainability. Lopez also addressed the need to direct investments toward productive sectors to ensure sustainable economic growth, despite the challenges posed by inflation. He insisted on the importance of productivity and the energy transition to remain competitive in global markets and mentioned Spain's efforts in renewable energy as an example to follow.

Finally, Lopez discussed the role of the World Bank's green funds to support companies specializing in production engineering, particularly those using solar panels. He stressed the importance of cooperation between countries to address economic and environmental challenges. Lopez also observed that the share of the agricultural sector declines as countries become richer, while the industrial and service sectors increase their share in the economy. He noted an increase in employment in Turkey over the past ten years, despite a decline in the agricultural sector.

Source: Dünya, June 4, 2024

“Air transport, a tool of power for Erdoğan’s Turkey”

In an article published in Le Monde, Nicolas Bourcier analyzes the reasons behind the international success of the airline Turkish Airlines: strategic government support, expansion and modernization of the fleet, exploitation of opportunities are among the combined factors explaining how Turkish Airlines managed to position itself as a major player on the global aviation scene.

>> Lire l'article complet