The manufacturing industry is one of the main drivers of the Turkish economy, accounting for 24.2 percent of total GDP. The Turkish manufacturing industry has been growing over the past decade and increasing at a CAGR of 12 percent since 2003. In 2012 it exceeded gross domestic product growth levels and reached approximately USD 103 billion.
The industry recovered quickly after the 2009 global economic recession and exceeded pre-crisis levels with a CAGR of 8 percent between 2009 and 2012. During the first quarter of 2013, Turkey achieved a remarkable manufacturing output growth rate of 4 percent while industrialized countries suffered significantly. According to the United Nations Industrial Development Organization (UNIDO), manufacturing output dropped by 2.9 percent in the Eurozone during the same period. Manufacturing output fell by 2.6 percent in the Czech Republic and 3.1 percent in Russia, while it increased slightly in Brazil with 1.4 percent and in India with 2.5 percent.
It is not surprising that Turkey has been emerging as a regional manufacturing hub. According to the Deloitte Global Manufacturing Competitiveness Index (GMCI), over the next five years Turkey will move up from 20th place in 2013 to 16th place in terms of current and future manufacturing competitiveness. This means that Turkey will be the 2nd (after Germany) most competitive manufacturing hub in the region covering EMEA (Europe, the Middle East and Africa) as well as Central Asia and the Caucasus.
Located at the crossroads of Europe, Asia and Africa, Turkey has historically always been at the epicenter of world trade routes. As major airway hubs in the region, Istanbul and Ankara airports provide practical travel routes with a maximum direct-flight time of 4 hours to capital cities throughout Europe, Western and Central Asia, the Middle East and Africa. This unique location enables investors to access surrounding markets of 1.5 billion people, a combined GDP of USD 25 trillion and more than USD 8 trillion in foreign trade, corresponding to approximately half of total global trade. Moreover, Turkey is a member of the EU Customs Union with, which facilitates the free movement of industrial goods and eliminates customs duties and quantitative restrictions. In addition, Turkey has free trade agreements with 19 countries and has started negotiations with a further 13 countries.
Thanks to its connectivity and trade partnerships, many multinational companies have either established their manufacturing bases in Turkey or moved their regional headquarters there, as the country offers a robust platform for economic expansion on a regional scale which enables these companies to leverage common qualities and local capabilities in Turkey. The Turkish government strongly supports the move of global company regional headquarters to Turkey. With a recent amendment to FDI legislation, foreign companies can now establish their regional management centers in Turkey under a liaison office structure without paying corporate tax, VAT, personal income tax or stamp duty.
With half of its population under the age of 30, Turkey’s young and dynamic population is creating one of the most skilled labor pools in the world. The number of students graduating from manufacturing-related departments in universities exceeded 32,000 in 2012, while there were more than 35,000 graduates from vocational training schools during the same period. Moreover, around 600,000 students graduate from universities in Turkey every year. This labor force, coupled with productivity and a disciplined work ethic, makes Turkey one of the most appealing investment destinations in the world for high value-added, knowledge-based and skills-intensive industries.
Full premium theme
The best odds.