Economy
Türkiye presents 2026 draft budget, reaffirms disinflation goal
Türkiye’s 2026 draft budget was set to be presented to Parliament on Thursday, foreseeing TL 18.93 trillion ($452.4 billion) in expenditures and TL 16.22 trillion in revenues, according to Vice President Cevdet Yılmaz.
Speaking at a news conference in Ankara to share details of the 2026 central budget proposal, the vice president reiterated that the Medium-Term Program (MTP) aims to strengthen macroeconomic and financial stability and lower inflation to single digits.
Yılmaz recalled that the MTP covering the 2026-2028 period was published on Sept. 7, stating that, thus, the 2026 budget process has begun.
“Prepared in line with the vision outlined in the 12th Development Plan, the Medium-Term Program aims to strengthen macroeconomic and financial stability, resolutely maintain fiscal discipline, and permanently reduce inflation to single digits and achieve price stability,” he said.
“In this regard, we aim to increase productivity across the economy, develop the R&D and innovation ecosystem, accelerate technological transformation in the transition to a green and digital economy, strengthen human capital, and provide a more efficient labor market structure,” he added.
Furthermore, he also pointed out that improving the business and investment environment, increasing resilience to disasters and reducing informality in the economy “are also among our objectives.”
He went on to describe the 2026 budget, which he said was prepared with an inclusive and sustainable development perspective, as a “stability and prosperity” budget.
He suggested that the budget was completed with the contributions of all ministries, as well as affiliated and relevant public institutions and organizations, in line with the vision and instructions set by President Recep Tayyip Erdoğan, and was prepared for submission to Parliament. Moreover, he recalled the work done under the auspices of the ruling Justice and Development Party (AK Party) over the past 23 years.
“We have made significant progress in our country’s physical infrastructure over the last 23 years, particularly through investments in transportation, energy, health care and digitalization. Today’s priority is to make public infrastructure investments more effective and strengthen the production and trade infrastructure to support private sector investments,” he said.
The vice president underscored that the budget was prepared “considering the needs and demands of all segments of society.”
He also said that the reconstruction in earthquake-affected regions and creating disaster-resilient cities would continue to be their priorities in this budget.
“We implement fiscal policy without compromising budget discipline by implementing measures to increase the effectiveness and efficiency of public expenditures and to reduce informality on the public revenue side,” he added.
Growth, unemployment expectations
Yılmaz also stated that, in a climate characterized by disinflationary policies, Türkiye’s economy grew by 3.3% in 2024 and that they anticipate the same growth rate this year.
“Our economy grew by 3.3% in 2024 and we anticipate that it will grow by 3.3% again in 2025,” he said.
At the same time, he emphasized that due to global uncertainties and the moderate global growth outlook, the Turkish economy is expected to grow by 3.8% in 2026.
“With the decline in inflation becoming permanent in this period, macroeconomic fundamentals will be further strengthened, and the favorable environment for predictability, investments and productivity increases will be further strengthened,” he noted.
He also said they expect the unemployment rate to fall to 8.5% in 2025 and to 8.4% in 2026.
Also touching on the record-breaking export trend of Türkiye, Yılmaz said they anticipate achieving their export target of $282 billion by maintaining the uninterrupted increase in exports for 2026.
He added that they continue to support exporters with all their resources and efforts to this end, prioritizing trade diplomacy, increasing product and market diversity, branding, green and digital transformation, and financing support.
Similarly, the vice president highlighted a positive trend in the growth of travel revenues over the last five years, emphasizing that this trend continues upward and continues to contribute to the current account balance. In line with this and the potential in the tourism sector, he said they anticipate tourism revenues would reach $64 billion by the end of this year and a new record level of $68 billion in 2026.
Yılmaz also stated that the moderate trend in imports continues, thanks to the policies implemented during the disinflation process.
“Furthermore, the decrease in energy imports has significantly contributed to the current account balance, and the improvement in the current account balance reduces the need for external financing,” he explained.
Disinflation process
On the inflation outlook, Yılmaz said that the downward trend in global inflation has slowed, and rigidity in service prices has continued to limit the improvement in core indicators.
“Despite this, our country is continuing the disinflation process it began in June 2024 with a strong and determined focus,” he stressed.
He stated that they will resolutely continue the disinflation process within the framework of a holistic program encompassing monetary and fiscal policies and structural transformations. He added that they expect the inflation to fall to 16% by the end of next year.
Inflation in Türkiye edged up slightly to 33.29% in September from 32.95% in August, but is expected to continue the downward trend observed earlier throughout the year.
Türkiye’s gross domestic product (GDP) is expected to be TL 62.2 trillion in 2025, before rising to TL 77 trillion next year, Yılmaz also said.
Budget allocation
Moreover, he shared detailed figures regarding the budget, suggesting they project that the budget expenditures in 2026 will be TL 18.93 trillion, and budget revenues will be TL 16.22 trillion.
“The 2026 budget includes an allocation of TL 653 billion to repair earthquake damage and increase resilience against disasters,” he said.
“We estimate that the budget deficit to GDP ratio in 2026 will be 3.5%. We project that the ratio of the budget deficit to GDP, excluding earthquakes, will be 2.7% in 2026,” he outlined.
According to the budget proposal, the largest share of spending is foreseen for education, at 15.3%, according to Yılmaz.
“Including higher education, we increase our education budget to TL 2.89 trillion in 2026. Thus, we are once again allocating the largest share of the central government budget, at 15.3%, to education,” he said.
He continued by saying that health is among their top priorities, along with education, and added: “We are allocating TL 1.59 trillion from the central government budget for health services to ensure our citizens benefit from health services in the best possible way. Taking into account health expenditures from the Ministry of Health, higher education institutions, and the Social Security Institution (SSK), the total resources allocated to health reach TL 3.3 trillion.”
Among others, he said, the defense expenditures are projected to be TL 1.2 trillion next year.
“With our 2026 budget, we will continue our march toward a strong and prosperous Türkiye, in line with our holistic development vision encompassing education, health care, energy, agriculture and industry,” he noted.
“I hope the 2026 Central Government Budget Law Proposal will be beneficial to our country and our nation,” he concluded.
Japan’s economy lost momentum in the second quarter and fell short of market forecasts, as subdued household and business spending highlighted the fragility of the recovery as the war in the Middle East darkens the outlook.
However, long-term bond yields hit a three-decade high as investors brushed aside the soft reading as reflecting one-off factors, and focused more on mounting inflationary risks that could prod the Bank of Japan (BOJ) to raise interest rates next month.
Gross domestic product (GDP) rose 1.1% in annualized terms, government data showed on Monday, missing a median market estimate of 2% and below an upwardly revised 1.9% expansion in the previous quarter.
While the data revealed some temporary soft patches in demand, analysts say robust underlying momentum and persistent price pressures are likely to keep the case for imminent interest rate hikes intact.
“Today’s GDP data was a bit weak but the economy is likely to continue recovering moderately,” said Naoki Hattori, chief Japan economist at Mizuho Research Institute. “Given risks of underlying inflation overshooting its target, the BOJ is likely to proceed with a rate hike next month.”
The BOJ is expected to raise rates as soon as September and is said to be considering hiking more aggressively thereafter to avoid being behind the curve on inflation.
The benchmark 10-year Japanese government bond (JGB) yield rose for a sixth straight session on Monday to hit a 30-year high of 2.925%, as investors continued to price in BOJ rate hikes sooner and faster than earlier expected.
Private consumption was the biggest disappointment in the GDP data, falling 0.02% versus market expectations for a 0.5% increase, the first drop in eight quarters.
Analysts said the weakness was due in part to lower school fees households paid thanks to subsidies, which pushed down headline private consumption but lifted government spending.
Capital spending, a key driver of private demand, fell 1.2% in the second quarter, confounding market forecasts for a 0.4% increase. However, capital expenditure, as well as overall preliminary GDP, tend to be revised higher with updated figures.
Exports remained resilient thanks to solid U.S. demand for Japanese hybrid vehicles and sustained global investment in artificial intelligence that supported shipments of semiconductor-related equipment and components.
Net external demand, or exports minus imports, added 0.5 percentage point to growth, largely because imports fell sharply after temporary disruptions to crude oil shipments through the Strait of Hormuz.
“I don’t think the BOJ would be too worried about today’s GDP data as the economy is showing remarkable resilience to headwinds from the Iran war,” said Yoshiki Shinke, senior executive economist at Daiichi Life Research Institute.
The government maintained its sanguine view on the economy.
“The economy remains on a moderate recovery path, with export-driven growth offsetting weakness in domestic demand,” Economy Minister Minoru Kiuchi said in a statement.
Outlook murky
Looking ahead, analysts cautioned that rising import costs and mounting upstream price pressures could eventually feed through to consumers, posing a risk to spending later this year.
Aside from rising fuel costs from the Middle East conflict, a weak yen has lifted import prices and broader cost-of-living for households, posing a headache for policymakers.
Such price pressures have led to a flurry of hawkish comments from BOJ policymakers that bolstered the case for an early rate hike.
The government has sought to cushion the blow to households from rising living costs with subsidies, though rising bond yields may prevent it from ramping up fiscal spending any further, some analysts say.
That spells trouble for consumption, which is mostly holding up so far as a tight job market prods firms to offer higher pay.
“Government subsidies have helped contain consumer inflation so far, but a weaker yen and higher crude oil import costs raise the likelihood of broader price hikes from the autumn onward,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
A survey this month by the Japan Center for Economic Research showed 37 economists forecast annualized GDP growth to slow to an average 0.05% in the July-September quarter.
“The boost to consumption from policy measures is already fading, and inflation will increase in H2 as firms will pass on increased costs, deteriorating consumers’ purchasing power,” Oxford Economics wrote in a research note.
“Although AI-related goods exports will continue to stay robust in the near term, sluggish non-AI related global economic activities will limit overall export gains.”
German companies’ investments in the U.S. have dropped to a three-year low in the first half of 2026, as Trump administration policies continue to raise uncertainty and pose risk for trade between the key trans-Atlantic partners, data shows.
First-half direct investments plunged by nearly two-thirds year-over-year to 4.3 billion euros ($5 billion), the lowest level since 2023, according to calculations by the German Economic Institute (IW), seen by Reuters.
Compared with the same period in 2024, that represents a drop of nearly 80%, said the report, which is based on data from Germany’s central bank.
“This continues the downward trend that has been evident since the start of Donald Trump’s second term in January 2025,” IW researcher Samina Sultan told Reuters.
Since returning to office, Trump has threatened most of the United States’ international trading partners with import tariffs in an attempt to secure concessions favourable to Washington.
In a bid to avoid heavy duties on its exports to the U.S., for example, the European Union agreed a deal last year that included a $600 billion investment pledge.
In the five years before the COVID-19 pandemic, first-half investments by German companies in the U.S. averaged 15.8 billion euros, the data showed, almost four times the 2026 level.
That said, the 2020 to 2023 period was shaped by the “exceptional circumstance” of the pandemic, Sultan said, with some years marked by net investment outflows.
The researchers also examined the composition of investment flows over 2025 and found that both direct-investment loans and reinvested earnings were exceptionally high, while equity capital in the narrower sense – the balance of new investments and liquidations – remained below average.
“Companies that are already active in the United States are therefore continuing to reinvest the profits they earn there in the country,” Sultan said.
“This suggests that the U.S. remains an attractive market overall.”
However, companies were hesitant to commit new capital, she said.
For more than a century, cafes in the Italian northern city of Padua have grown accustomed in welcoming customers for an early evening drink, or aperitivo, encouraging them to sit outside and socialize just at the time before dinner.
As Europe bakes under its fifth heat wave of the year, the traditional 6 p.m. to 7 p.m. slot has all but disappeared as people seek air-conditioning indoors, cutting sales for many hospitality businesses.
Adding to the pressure, extreme heat often falls outside traditional business interruption insurance, exposing a growing protection gap for companies across Europe.
Moody’s has published estimates that last summer’s European heat waves cost 43 billion euros ($50 billion) in lost economic output while generating only about 500 million euros of insured payouts.
In Padua, aperitivo often now starts later, “which means that the outdoor seating areas, the terraces, the spaces outside … are left unused and empty,” said Federica Luni, president of hospitality association APPE Padova.
According to a survey of about 600 hospitality businesses in the city and its province, more than 80% reported turnover declines of around 20% during the recent heatwave.
“A 20% decline wipes out your margin,” Luni said.
Toll on economy
Heat waves are increasingly taking a toll on Europe’s economy, reducing productivity, curbing consumer spending and raising operating costs.
For insurers, such losses can be difficult to cover because they often stem from indirect operational disruption rather than property damage.
“Heat in itself is not a traditionally insured risk,” said Swenja Surminski, managing director for climate and sustainability at Marsh.
“Extreme heat rarely causes catastrophic physical damage the way a flood or a storm does, but the financial operational disruption that it triggers can be just as severe.”
A 2023 survey of 9,000 small and medium-sized firms for Europe’s insurance regulator found 28% held business interruption cover as part of their property insurance, while 17% had non-damage business interruption protection covering events such as strike action.
The protection gap is widening as the economic costs of extreme heat mount. Trains are delayed, agricultural yields fall and factory cooling costs rise, while workers often struggle to maintain productivity during prolonged spells of extreme temperatures.
Companies that flagged a hit from hot weather or warned about its potential future impact when reporting second-quarter earnings included Swedish shop-fitting provider ITAB Group, Italian cement producer Buzzi and French payments firm Worldline.
Compound risk
Heat often acts as a compound risk, interacting with drought, wildfire and water shortages rather than triggering a single identifiable loss event. That makes it harder to model and insure than some other natural catastrophes.
The challenge is particularly acute in Europe, the fastest-warming continent. Reuters Climate Monitor showed the average temperature across Western Europe was nearly 10 degrees Celsius (18 degrees Fahrenheit) above the 1961 to 1990 average on Aug. 11.
Data compiled by environmental disclosure platform CDP showed 35% of companies it tracks identified heatwaves as a risk driver, led by businesses in manufacturing, services, infrastructure and food-related sectors.
While insurance may cover some physical losses linked to events such as power outages, businesses often say compensation does little to offset lost sales and reduced customer activity.
“The real loss is the revenue you don’t make and the business activity that never takes place because of the outage,” Luni said.
To bridge the gap, insurers are increasingly exploring parametric products that pay out automatically when temperatures exceed predefined thresholds. Unlike traditional indemnity-based insurance, such policies do not require a lengthy loss-adjustment process.
The European market for parametric insurance is expected to reach $7.93 billion by 2031, according to a report by KBV Research, with compound annual growth of 9.5% between 2025 and 2032.
Such policies are already being used in agriculture, where heat can reduce crop yields or livestock productivity, and industry experts see scope for expansion into sectors including transport and workforce protection.
“Parametric insurance can really play a role,” said Aidan Kerr, head of U.K. and Ireland public sector solutions at Swiss Re.
Even so, many companies will need to focus primarily on adapting their operations to withstand more frequent periods of extreme heat through measures such as investing in cooling technologies, redesigning workplaces and stress-testing supply chains, Marsh’s Surminski said.
“Take action to avoid the losses rather than address them once they’ve occurred.”
Over nearly a quarter-century, Türkiye’s defense sector has transformed from foreign-dependent licensed manufacturing into a high-capacity industry driven by high domestic content and robust global exports.
The transformation coincides with the 25-year period of the ruling Justice and Development Party (AK Party), which marked its anniversary on Friday.
Türkiye now develops a broad range of indigenous platforms and systems, invests in critical technologies and exports high-value-added products across the globe.
In 2002, Türkiye had only 56 defense firms and some 62 projects underway. Those figures today stand at more than 4,500 and 1,400, respectively.
The total project volume skyrocketed from $5.5 billion in 2002 to over $100 billion today.
Defense and aerospace exports surged from just $248 million to $10.05 billion in 2025.
Shipments hit $5.79 billion in the first seven months of 2026 and totaled $11.2 billion on an annualized basis as of July.
Türkiye is currently the world’s 11th-largest defense exporter and is close to breaking into the ranks of the top 10.
For much of the past two decades, Ankara has expressed frustration over its Western allies’ failure to provide adequate defense systems against missile threats despite Türkiye being a major NATO member.
That prompted it to invest billions of dollars to transform from a nation heavily reliant on equipment from abroad to one that is a major exporter and where homegrown systems now meet almost all of its defense industry needs.
Its research and development spending increased from $49 million in 2002 to over $3.5 billion, while the domestically produced content ratio increased from 20% to more than 85%.
Shift to domestic development
The Turkish defense sector provides direct employment to over 100,000 people, and the average age of a defense industry worker is 34.
Turkish defense was dominated by off-the-shelf purchases, licensed production and technology transfer in the early 2000s. This trend gradually shifted to promote domestic development, homegrown original design and the localization of critical subsystems.
The sector’s scope of operations expanded as project scales grew, with a broad range of products and technologies emerging, such as armored vehicles, conventional platforms, unmanned systems, warships, jet aircraft, air defense systems, radar and electronic warfare systems, smart munitions, engines, space technology and advanced electronics.
The Turkish defense and aerospace industry made around $1.1 billion in revenue in 2002, while this figure exceeded $20 billion by 2026.
Unmanned aerial vehicles
Unmanned aerial vehicles have been one of the most significant areas of transformation over the past 25 years.
Defense firm Baykar’s Bayraktar TB2 unmanned combat aerial vehicle became one of the most symbolic breakthroughs in Turkish defense.
The combat drones earned worldwide fame after proving their capabilities in several conflicts, including Syria, Libya, Karabakh and Ukraine.
Their success eventually helped Türkiye become one of the world’s top drone exporters.
Baykar’s multirole Bayraktar Akıncı platform further improved Türkiye’s drone capabilities with its high payload capacity, long range, advanced sensors and heavy munitions integration.
Baykar’s Bayraktar Kızılelma carried Türkiye’s drone expertise into the unmanned fighter jet area by combining high speed, air-to-air and air-to-ground capabilities and the ability to operate from short-runway ships.
Turkish Aerospace Industries’ Anka and Aksungur unmanned combat aerial vehicles contributed to the development of high-altitude, long-endurance and strategic reconnaissance and surveillance capabilities of Turkish drones by integrating satellite communications, homegrown electro-optical systems, munitions and engines.
Growing aviation industry
The Turkish Aerospace Industries’ under-development twin-engine stealth fighter Kaan and the Hürjet jet trainer also marked major milestones in Türkiye’s manned aviation.
The Kaan is one of the most technologically ambitious programs in Turkish aviation with its low observability, advanced avionics, mission computer, radar and system integration.
The Hürjet was developed to provide a homegrown trainer platform to advance the country’s capability to develop manned military aircraft.
The Turkish Aerospace Industries T129 Atak helicopter’s product and system integration experience translated into the homegrown T625 Gökbey helicopter, marking a giant leap in rotary-wing technologies.
State-of-the-art naval defense
Beyond aerial systems, Türkiye’s national ship project, called MILGEM, laid the foundation for domestic naval platform design, ranging from corvettes to frigates.
Advancements in combat management systems, sensors and weapon integration became key to ensuring independence and export capacity in naval defense.
The TF-2000 anti-air warfare guided-missile destroyer extended the Turkish Navy’s air defense capabilities to the high seas through its long-range air defense and advanced radar and weapon-sensor integration.
The unique naval engineering capabilities Türkiye gained through the MILGEM project enabled the development of the country’s domestic submarine project, called MILDEN, to develop underwater platforms.
The partnership between the TCG Anadolu drone carrier assault ship and the Bayraktar TB3 combat drone introduced a new sea-air operations concept to the Turkish defense industry, integrating amphibious capabilities with a UAV capable of operating from short runways.
Missile defense systems
Meanwhile, Türkiye’s air defense architecture also grew with Roketsan and Aselsan’s Hisar and Siper missile systems, which contributed to a layered air defense architecture combining integrated sensors, command-and-control systems and missile systems within a single domestic architecture against various threats at low, medium and high altitudes.
Türkiye’s multilayered air defense system, Steel Dome, has been developed by bringing together radars, electro-optical sensors, electronic warfare components, command-and-control infrastructure and air defense weapons of various ranges under a common network.
Roketsan’s Som, Atmaca and Kara Atmaca developed long-range precision strike capabilities for air, sea and land platforms, while the same firm’s Tayfun missile introduced the ability to engage long-range and precision land targets, boosting Türkiye’s strategic deterrence.
Turkish defense also evolved in surface vehicles, with the main battle tank Altay establishing a broad industrial ecosystem around critical technologies, such as armor, active protection, fire control and power packs, while also highlighting the strategic importance of reducing foreign dependence on engines and power packs.
Aselsan’s Koral electronic warfare system and other homegrown radar systems enhanced the effectiveness of air, land and sea platforms in modern warfare through radar detection, electronic jamming, early warning and sensor superiority.
Indigenous technologies
Meanwhile, the PD170, TF6000 and KTJ engine projects brought power system developments for UAV engines, turbofans, cruise missile engines and more.
These projects have been key to ensuring platform independence in defense through indigenous engine technologies.
At the same time, Turkish defense transformed its export model from direct product sales to a broader approach that includes training, maintenance and sustainment, system integration, co-production and technology cooperation.
Turkish defense products are exported to some 185 countries, and around 230 different product types are actively used worldwide.
The sector’s primary goal this year is to further independence efforts in critical technologies, establish high-volume mass production capacity and permanently expand its share in the global market.
Business partnerships should complement the strong political relations between Türkiye and Pakistan, Khawaja Khurram Naeem, the Consul General of Pakistan in Istanbul, said on Thursday, also pointing to the potential of the Pakistani economy and a push to encourage investment and growth.
“We strongly believe that government-to-government cooperation must be complemented by the robust business-to-business engagement,” Naeem said in an address to the “Global Excellence Award Ceremony,” organized by the Islamabad Chamber of Commerce and Industry (ICCI) in Istanbul.
Starting his speech, the consul general noted that the close relationship between Türkiye and Pakistan, two brotherly countries, is “based on a shared history, mutual trust, and a common vision for economic prosperity.”
He added that the business forum provided an important opportunity to further strengthen commercial and investment ties between the two nations.
Pointing to positive developments in Pakistan’s economy, Naeem said the Islamabad government has taken important steps to encourage investment and create a more business-friendly environment.
“The government’s commitment to gradually reducing the corporate tax rate to a more competitive level demonstrates the determination to encourage investment and economic growth,” he added.
He also went on to highlight the potential for regional cooperation involving Türkiye, Pakistan and Central Asia amid the changing geopolitical landscape.
Naeem said Pakistan has particularly significant potential in the textile and ready-made garment sectors, while also noting that the country has extensive production capacity and a young population.
“Sustainable economic growth can only be achieved through active cooperation between the private sectors of both countries, reciprocal visits, and the establishment of long-term partnerships,” he said.
Naeem invited business representatives to explore new opportunities, forge new connections, and develop mutually beneficial partnerships through the forum.
In his speech, Naeem also thanked all the institutions that contributed to organizing the event, particularly the Islamabad Chamber of Commerce and Industry and the Istanbul Chamber of Commerce (ITO), and other Turkish partners, and expressed hope that economic activities between Pakistan and Türkiye would continue to grow stronger.
At the event, the business leaders recalled that the current bilateral trade volume between Türkiye and Pakistan of around $1.2 billion is relatively modest and urged for more steps, including more B2B meetings and reciprocal visits, to elevate the cooperation.
South Korean automaker Hyundai on Friday started mass production of its new all-electric IONIQ 3 model at a factory in Türkiye’s northwestern Kocaeli province.
It makes Hyundai the first foreign automaker to manufacture battery-powered passenger cars in Türkiye and also marks the company’s first EV production in Europe.
The launch represents a significant step in Türkiye’s strategy to position itself as a regional production hub for electric vehicles and battery technologies while attracting new investments in next-generation mobility.
Industry and Technology Minister Mehmet Fatih Kacır said the investment demonstrates growing international confidence in Türkiye’s manufacturing capabilities and industrial ecosystem.
“The investment is one of the most concrete outcomes of our vision to make Türkiye one of the leading countries in next-generation mobility technologies,” Kacır told the start-of-production ceremony at Hyundai Motor Türkiye’s Izmit plant.
In June, Hyundai also announced it would build a new 55 million euros ($63.8 million) battery assembly facility that it says will strengthen the investment in the production of the IONIQ 3.
The facility will assemble battery packs using automated systems in cooperation with Hyundai Mobis.
“An international automaker is producing a fully electric passenger vehicle in our country for the first time,” said Kacır.
“The accompanying battery investment demonstrates that Türkiye has crossed an important threshold in its goal of becoming a global production hub for electric vehicles and battery technologies.”
Hyundai is investing approximately 250 million euros in the project and will initially produce 30,000 IONIQ 3 vehicles annually at the Izmit facility.
The plant has operated in Türkiye for nearly three decades and is Hyundai’s first and longest-running overseas manufacturing facility outside South Korea.
It has produced 13 different models and about 3.3 million vehicles since operations began in 1997. The Izmit plant currently produces the i20 and Bayon models.
Government investment incentives have helped expand the factory’s annual production capacity from 50,000 vehicles in 2002 to 230,000 today.
Hyundai Motor Group plans to invest $90 billion globally by 2030, launching 21 fully electric and 13 hybrid models.
Building on Türkiye’s automotive industry
Kacır said the automotive industry has become one of the main pillars of Turkish manufacturing, increasing annual production from 357,000 vehicles to 1.5 million over the past 23 years.
Automotive exports have risen to $41.5 billion from $4.8 billion in 2002.
The sector directly employs around 60,000 workers in vehicle manufacturing and nearly 250,000 in the supplier industry.
Kacır said the government views the global shift toward electrification, connected vehicles and autonomous driving technologies as an opportunity to strengthen Türkiye’s industrial competitiveness.
He reiterated that the domestically developed Togg electric vehicle project was conceived not only as a car brand but as the foundation of a broader mobility ecosystem encompassing battery technologies, software, power electronics and charging infrastructure.
“The success of our new mobility vision depends on expanding the transformation initiated by Togg across the entire automotive industry,” he said.
“It is therefore extremely important that global manufacturers already producing in Türkiye direct their next-generation mobility investments to our country.”
EV market expanding rapidly
Türkiye’s domestic electric vehicle market has also grown rapidly.
Kacır said more than 450,000 electric vehicles are currently on Turkish roads, while fully electric models account for more than 17% of local vehicle sales this year.
The government expects the number of electric vehicles in circulation to exceed 1.5 million by 2030.
Kacır said Türkiye offers international investors significant advantages, including a large domestic market of 86 million people, a $1.6 trillion economy, an extensive supplier network and logistics infrastructure, as well as preferential access to around one billion consumers through the customs union with the European Union and free trade agreements.
Kacır said Hyundai’s investment is expected to encourage additional next-generation mobility projects and attract further foreign investment, particularly from South Korean companies.
“We hope Hyundai’s investment decision will serve as an example for other South Korean companies,” he said.
“Türkiye will continue to support all investors who produce, develop technology, create qualified employment and strengthen our position in global value chains.”
-
Sports3 days ago6 Arab federations reaffirm support for Infantino amid FIFA rift
-
Sports2 days agoFerran Torres joins PSG from Barcelona on contract through 2031
-
Politics3 days agoAK Party marks 25 years as Türkiye’s dominant political force
-
Economy3 days agoHyundai launches IONIQ 3 production to embolden Türkiye’s EV ambitions
-
Economy3 days agoAzerbaijan overtakes Russia as Türkiye’s biggest pipeline gas supplier
-
Politics3 days agoTRNC leaders commemorate Turkish Cypriots killed in 1974
-
Economy3 days agoPakistani consul general calls for stronger business ties with Türkiye
-
Sports3 days agoTürkiye expands zero-waste approach into sports, Olympic movement