The report titled "Improving Competitiveness in Exports" prepared by TİM in cooperation with PwC Türkiye was announced to the press and public by Mustafa Gültepe. Gültepe stated that in the report, they focused on nine sectors in the manufacturing industry, including automotive, chemistry, machinery, electrical and electronics, textile, ready-made clothing, steel, non-ferrous metals and furniture. Pointing out that the sectors examined will realize approximately 70 percent of the total exports of 166 billion dollars in 2025, Gültepe continued as follows:
"The report was prepared in the field, not at a desk. We evaluated more than 200 product groups in nine sectors. We organized separate workshops with each sector. We compared the data of more than 20 competing countries. We revealed the pros and cons in costs, productivity and technology capacities, logistics opportunities, incentives, human resources, industrial and trade policies. We are in a good place in most of these parameters. Our production capacity is still very strong. We have export experience. We are close to Europe and the Middle East. "We have flexible production and fast delivery capacity. We are partially advantageous in logistics and freight costs. However, despite these advantages, we cannot turn our production capacity into global competitiveness because, as we have been emphasizing for years, the root of the problem is costs. The report clearly shows where the problem comes from from an outside perspective."
Mustafa Gültepe underlined that labor, energy, financing, raw material and logistics costs in Turkey are rising much faster than rival countries. Stating that the average annual inflation in Turkey in the 2019-2025 period is around 38 percent, Gültepe continued his words as follows:
"The average inflation in all competing countries we compared is in single digits. There is no country whose average inflation exceeds 8 percent. This divergence has directly added to the exporter's cost. Since 2019, the minimum wage has increased by 1290 percent, raw material and intermediate goods prices by 1250 percent, and energy prices by 1490 percent. In the same period, the increase in the dollar exchange rate remained at 860 percent. Since the exchange rate did not increase at the same pace, energy prices in dollar terms increased by 74 percent, There was a 51 percent increase in the minimum wage and a 55 percent increase in general costs. For example, the production cost of a machinery product in our country increased by 60 percent compared to 2022. This rate was 58 percent in ready-made clothing and 55 percent in furniture. The cost structure, which was more stable in rival countries, was disrupted in Turkey. In all the sectors we examined, the weakening of our pricing ability brought about market losses. The share decreased from 1.08 percent to 0.98 percent in two years. The market loss was also reflected in capacity and employment. The number of insured employees in the manufacturing industry decreased by 480 thousand in four years. We have been standing out as a price-performance country for years, offering quality products with reasonable prices and fast delivery. The report points out that this balance is being challenged from two sides. While low-cost producers in Asia are putting pressure on us, our competitors in Europe are competing with us in the same markets. "The result did not come as a surprise to us. The problem we have been expressing from the field for years has been confirmed by the data of an independent study."
Mustafa Gültepe underlined that the problem in competitiveness closely concerns the future of exports. Emphasizing that in order to be assertive in global trade, we need to allocate more resources to technology, R&D, innovation, twin transformation, design and branding, Gültepe said:
"The prerequisite for transformation is price competitiveness. In order for the exporter to invest in all these areas, he must first be strong in the markets. A company that loses a market cannot allocate resources to the transformation. If we cannot compete today, we cannot invest in tomorrow. The erosion of price competitiveness in recent years risks turning into a strategic problem for the future of exports. Therefore, we need policies that prioritize competitiveness. The report, which is a road map to re-strengthen our competitiveness, recommends 189 policy steps for nine sectors. The report includes specific sector-specific recommendations. "Achieving a permanent position in target markets, structuring supports on the basis of added value and performance, more support for R&D, product development and innovation, and updating the European Union (EU) and the Customs Union stand out as the topics that all sectors have in common."
Mustafa Gültepe added that he has confidence in Turkey's production potential and the large export family with more than 160 thousand members, and that if the competitive conditions of three or four years ago are met, they can take firm steps towards medium and long-term goals with double-digit annual increases.
