The Current Development of the Turkish Machine Tool Market

What Does It Mean by "Turkey Machine"?

Turkey Machine means Turkish machinery industry, especially machine tools produced by Turkey manufacturers.

Turkey has participated in the EU’s Customs Union since 1996. It has also signed Free Trade Agreements (FTAs) with 27 countries, and more FTA negotiations are underway in some fashion. Turkey's global location allows it to reach 1.6 billion customers in Europe, Asia, the Middle East, and North Africa. This means it can easily establish economic and trade relations with these areas with vast opportunities to expand its Gross Domestic Product (GDP) to 2.4 trillion US dollars.

Taiwan's machine tool industry has gradually recovered from the bottom of the U.S.-China trade war and the COVID-19 pandemic. Looking forward to 2021, the demand in China, the U.S., and other markets, including Turkey, will gradually pick up. In 2020, the top 10 exporting destination countries of Taiwan's machine tools were China, the United States, Turkey, Russia, Vietnam, Thailand, India, Japan, the Netherlands, and Malaysia in order of export value. Among them, Turkey accounted for 7.7%, with an annual growth rate of 82%. Turkey was one of the few growing markets for Taiwan's machine tool exports in 2020. The Turkish market is expected to grow by 54% in 2021.

The development of the Turkish machinery industry began in the 1960s. It began with the production of sugar machines, pumps and diesel engines, boilers and conveyors, storage tanks, pressurized tanks, and machine tools by state-owned and private enterprises. By 2019, the machinery manufacturing industry had already accounted for 4.5% of Turkey’s overall manufacturing industry. The main production projects of the Turkish machinery industry have included internal combustion engines, boiler burners, pulverizes, construction machinery, heavy industry machinery, machine tools, cutting machines, woodworking machines, steam engines, textile machines, food processing machines, sewing machines, etc. The Turkish machinery industry is now able to produce high-quality parts and accessories for the above-mentioned products at competitive prices, with more than 1,000 manufacturers. Turkish exporters follow EU standards and regulations, and all products have CE certification.

Turkish Machine Tool Development

The machine tool is the "machine that produces the machine." Important sectors of the engineering industry include automobile manufacturing, aerospace products, and general industrial equipment. These departments, together with the subcontractors who supply them, constitute the customer base for machine tool supply. Therefore, it is usually regarded as a strategic department of a country.

In the mid-1960s, Turkey began to produce machine tools, with private companies producing lathes. According to the country's industrialization efforts, national institutions have played a leading role in the machine tool industry. During this period, CNC machining centers were introduced into the world market. Global and Turkish industrial manufacturers needed these high-tech, computer-controlled machine tools. Since the early 1990s, the Turkish machine tool industry has been able to meet this new demand. Turkish machine tool manufacturers have been working hard to produce better innovative machine tools with higher technology. At present, Turkey relies on Turkish-made machine tools, and Turkey has the 12th largest manufacturer among the world’s 28 top machine tool manufacturers.

Turkey Machine Tool Import and Export Statistics

According to customs import and export statistics, from January to November 2020, Taiwan’s exports to Turkey amounted to US$970.18 million, an increase of 4.8% from US$925.37 million in the same period in 2019. Of the top five export products, only machinery showed an increase in exports, while motors and electronic products fell 3.6%, plastic products fell 7.8%, steel products fell 12.9%, and rubber products fell 9.0%. Machinery products export value reached 333.22 million U.S. dollars, an increase of 55.3% from the export value of 214.48 million U.S. dollars in the same period in 2019. This was the main growth driver for Taiwan’s exports to Turkey.

In addition, according to the statistics made by The Machine Tools Industrialists and Business Association (TİAD), the purchase demand and import value of Turkish machine tools have gradually declined from 2015 to 2019, while the production and export of domestic machine tools has gradually grown, showing that in Turkey, the machine tool industry has gradually become internationally competitive. In addition, to protect domestic industries and reduce dependence on imported products, the Turkish government has issued additional tariffs ranging up to 40% on several products, making exceptions for industries that cannot be produced locally or have strategic considerations. According to statistics, in the first half of 2020, due to the impact of the COVID-19 epidemic in Turkey, many factories stopped working. The production and exports of domestic machine tools experienced a significant decline of 1 to 20% compared with the same period in 2019, while imports have shown slight growth. After factories gradually resumed work in June 2020, the situation gradually improved in the second half of the year. In the first half of 2020, the top 10 export markets for Turkish machine tools were mainly European and American countries. In the first half of 2020, Taiwan took the lead in importing machine tools from Turkey, accounting for 17% of Turkeys machine tool exports, followed by Germany (13%), Japan (11%), Italy (11%), China (10%), South Korea (10%). In terms of Turkey’s machine tool imports, Taiwan's machine tool exports to Turkey in the first half of 2020 reached US$78.35 million, an increase of 35% over the same period in 2019, surpassing Germany to become Turkey's largest source of machine tool imports.