The machine manufacturing industry holds strategic significance in the development process of countries creating a multiplier effect in economic development by defining the manufacturing skills of other sectors through investment, intermediate goods and the services it offers. A developed machine manufacturing industry provides a critical competitive power over other countries in the manufacturing industry.
The machinery industry in Turkey has been growing at a rate of nearly 20 percent per year since 1990. The growth of the Turkish machinery sector is backed by highly competitive and adaptable small and medium-sized businesses (SMEs), which form the bulk of the industrial production in the country.
As the drivers of growth in machinery and major contributors to the industrialization of the country, Turkish SMEs distinguish themselves from their peers in other countries by their utilization of the low-cost and highly skilled work force Turkey offers. Another indicator of the advanced level of the Turkish machinery industry is the rate of domestic input in the production stage. Around 85 percent of domestic input not only reduces the dependency on foreign sources, but also helps other local industries.
The combined advantage of the engineering capability required to compete in the international market with reasonable labor costs enable the Turkish machinery industry to offer a range of products and components that are both high-quality and affordable.
The machinery production of Turkey has also started to take up an increasing portion of the country’s exports, and accounted for 8.3 percent of total exports with USD 9.4 billion in 2010. The major export destinations of Turkish machinery products include Germany, France, the UK, Italy and Iran respectively. On the other hand, Turkey imports machinery products mostly from China, Germany, Italy, France and the USA. Despite robust domestic production of machinery, the imports of machinery (USD 21.3 billion in 2010) are higher that exports, indicating the increasing domestic demand for machinery.
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Turkey’s machinery industry has been given ambitious export targets for the country’s 100th anniversary in 2023. To reach USD 100 billion of exports with a share of 2.3 percent of the global market, the Turkish machinery industry is projected to have a CAGR of 17.8 percent until 2023. By that time, the sector’s share of Turkey’s exports is expected to be no less than 18 percent. |
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The machinery industry has also been attracting foreign direct investment (FDI), attracting more than USD 771 million over the past ten years.
|
2002 |
2003 |
2004 |
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011* |
|
13 |
16 |
6 |
13 |
54 |
48 |
226 |
220 |
64 |
51 |
Source: Central Bank of the Republic of Turkey (CBRT)
*2011 January-September