We Aim to Consolidate Our Position In The Mobility Transformation

As the automotive industry, which has been the export champion of the Turkish economy for 16 years consecutively, we have been taking firm steps forward for our export target of USD 33 billion in 2022. Considering our performance in the first half of this year, we have achieved an export figure of USD 15 billion 261 million with an increase of 6% compared to the same period of last year. The average monthly export figure is around USD 2.5 billion.

 

In this period, exports of all product groups except passenger cars increased. Our supply industry achieved an export figure of USD 6.5 billion with an increase of 9%. In this period, Germany became the country to which we exported the most with USD 2.2 billion, and it was followed by the United Kingdom with USD 1.6 billion, and France with USD 1.5 billion. Considering the export figures in terms of country groups, Members of the European Union remain our top market with a share of 65%.

 

Although our exports increased in the first half of the year, we could not achieve the expected increase. In this period of the year, we also have a loss due to EUR/USD parity. Considering the product groups, the increase in the export figures of the supply industry has been going on, and the situation in commercial vehicles is also better; however, we have experienced the biggest loss in passenger car exports.

 

We should keep in mind that the automotive industry has faced multiple problems such as the global chip crisis and energy costs, and we have been naturally affected by this situation.

 

In the January-June period, the European passenger car market experienced a shrinkage of 14%. This is one of the major reasons why we could not achieve our desired export increase in passenger cars. However, we are hopeful that the recovery will be swift once production problems are resolved since there is no decrease in the demand.

 

Therefore, although our automotive export figure is behind our targets, for the time being, we have not revised our export target. We anticipate that the second half of the year will be better than the first half. Let us also underline that the performance of passenger car exports will be the main determinant in achieving our export target.

 

 In the Turkish automotive industry, we face several chain problems. The process we have been going through involves risks and opportunities. For instance, we look at the Russo-Ukrainian War from several different perspectives. The total share of Russia and Ukraine in our total automotive exports is 3%. We have experienced sharp declines in our automotive exports to both Russia and Ukraine since the beginning of the war. Therefore, we face a great loss in these markets. A long war and high commodity prices will be the greatest risks for 2023.

On the other hand, we have been experiencing an increase in demand from both Russia and European countries due to problems in the supply chain. The desire of European countries to bring their supply bases closer especially for reducing the supply chain problems that have peaked with the COVID-19 pandemic is very important considering Turkey's proximity to this market. To turn this risky situation into an opportunity, we should strengthen our production and logistics network, focus on the zero-carbon target in production and energy, and be prepared for the risks that may arise due to the current risks.

 

The automotive industry has been undergoing a worldwide transformation. 

We have reached the end of the stage that can be reached with fossil fuel motor vehicles and traditional components and parts. The transformation, new trends, and technologies in the automotive industry have been transforming the industry into a completely different structure, i.e. the mobility ecosystem. This transformation of our industry will also change the inputs used in manufacturing and the manufacturing methods. The achievements of Turkey in traditional automotive manufacturing and exports do not guarantee our future. High domestic production rates, which are of great importance in the competitiveness of our industry, face the risk of falling. If the necessary transformation cannot be carried out, there is a risk that our domestic production rates, which have reached 70% in passenger cars and 80% in commercial vehicles, will decrease down to 20%.

 

The Climate Policies of the EU, which is our biggest market, are also the main factor challenging the transformation in the industry. The EU aims to reduce greenhouse gas emissions by 55% by 2030 and to be climate-neutral by 2050 In the automotive industry, on the other hand, the sale of internal combustion engine vehicles will be prohibited in 2035. In our automotive trade with the EU, we will face additional taxes within the scope of the Emission Trading System as of 2026, when the transition period ends. Electric vehicles are very important in this process, which aims at zero carbon. The market share of electric vehicles has reached almost 10% in the EU. We're still behind on this. It is of great importance to attract electric and autonomous vehicle investments that will make a difference in the automotive ecosystem in the future. We need to expand electric vehicles in the domestic market as well.

 

Also, the development of the automotive supply industry in product groups such as electronics, software, batteries, charging equipment, digital dashboards, cameras and sensors, and lightweight materials, which will also constitute a significant proportion of the vehicle cost, will be critical for sustainable competitiveness. The added value of the new generation vehicles and the new generation components and parts to be produced as a result will be higher. We can expect our automotive export figure, which is around USD 30 billion today, to increase to USD 50 billion or even higher if we achieve this transformation. However, if we fall behind this transformation, we may even fall below today's figures.

 

Therefore, in the Turkish automotive industry, we need to read the transformation well, make preparations and be a part of this transformation. As Automotive Industry Exporters' Association (OIB), the only coordinator association of the Turkish automotive industry for exports, we have focused on this issue for a while. We closely follow up with the developments in the world automotive industry and take action for the development of our industry. With our entrepreneurs, we aim to keep up with the great transformation and brand new opportunities in the automotive industry and to increase our share in the world market.