Anticipates increased investments in electric vehicle sector from Chinese manufacturers, according to Turkey's statement

In a bid to bolster its economy, Turkey is actively courting high-tech semiconductor, energy, robotics, and automation-related investments from Japan, as well as investments in sectors like chemicals, machinery, energy equipment, and food and beverages from foreign companies.

The Turkish government's economic program, adopted in June 2023, prioritizes price stability and aims to cool down the economy and decrease inflation. This tightening in monetary policy, with the central bank raising its main rate to 50% from 8.5%, seems to have taken effect, as markets estimate Turkey's inflation will drop to around 43% at the end of this year.

Turkey's efforts to attract foreign direct investment (FDI) are not limited to Japan. The country aims to attract 1.5% of global FDI inflows by 2028, up from the average of 0.9% in the last two decades. In the last decade, 63% of FDI in Turkey came from Europe and 10% from the US, but the share from Asia, excluding the Gulf Cooperation Council, has been steadily rising. Between 2003-2023, Turkey attracted USD 262 billion in FDI, with this Asian share increasing from 9% to 21% between 2012-2023.

One of the most significant developments in Turkey's FDI landscape is the influx of investments from China. Chinese automobile companies BYD and Changan have declared investments in Turkey, with BYD building an assembly plant there. Positive results from these investments are expected in the coming quarters, particularly starting from 2026 when initial models like the Dolphin and Atto 3 are planned to roll off the production lines in Europe and Turkey.

If an economic partnership agreement is signed, the number of annual acquisition deals by Japanese companies in Turkey could be "easily doubled", according to Turkey's Minister of Trade, Mehmet Musa Daglioglu. Total investments by Japanese companies in Turkey are close to USD 4 billion, with more than 250 companies, including Toyota Motor, Daikin Industries, and Mitsubishi Electric, being active in Turkey.

Half of the investments in high-tech sectors, like EVs, are expected to come directly from foreign investors and their joint ventures with local partners. Talks with several Chinese EV companies, including Chery Automobile and SAIC Motor, are going positively for potential investments in Turkey. BYD has announced a USD 1 billion investment in a factory for electric vehicles and plug-in hybrids in Turkey.

Turkey's renewed focus on attracting FDI is not just limited to Japan and China. Ankara is also in talks with other foreign companies for investments and has announced a package of USD 30 billion in incentives for sectors like EVs, batteries, chips, and renewable energy equipment. Turkey targets boosting its FDI share with the CEEMENA countries to 12% from 9.8%, competing with regional rivals like Poland, Israel, the Czech Republic, and Egypt.

With the economy showing signs of stabilization and the government offering substantial incentives, Turkey is well-positioned to attract significant FDI in the coming years, particularly in high-tech sectors like EVs and renewable energy.

Anticipates increased investments in electric vehicle sector from Chinese manufacturers, according to Turkey's statement