Growing demand for construction machines

About 50 companies that are looking to enter the Turkish market via mergers or acquisitions are conducting market research in Turkish cities, including Ankara. Other cities being investigated are Konya and Gaziantep.

Among the firms seeking to invest in the Turkish market are China’s Sany and Zoomlion, Korea’s Hyundai, Germany’s Liebherr and France’s Mecalac. has been failing to meet the companies’ demand as their orders have contracted because of the global economic crisis. Many producers in the region have begun to search for alternatives, presenting an opportunity for Turkey due to its geographic location, market volume and quality products.

Turkish firms did not even have the courage to participate in fairs that China was attending, said Faruk Aksoy, chairman of the Construction Equipment Distributors and Manufacturers Association of Turkey, or İMDER.

Now Chinese fair organizers are paying for our hotels and stands and urging us to attend events. "The conditions set by the global economic crisis make it almost impossible to place large orders. Fast, quality and dependable products are currently in demand. That puts Turkey up front."

Another reason for investors to choose Turkey over other countries is its proximity to European Union markets as well as many others, according to Aksoy. "Turkey is at a three-hour-flight distance and has a big trade volume. Construction machinery producers have an opportunity to grow 50 percent a year in Turkey, while in the EU their annual growth is limited to 1 to 2 percent. Europeans want to relocate their factories to Turkey."

There has been a 50 percent contraction in the construction machinery industry due to the global turmoil and the cancellation of incentives for leasing, Aksoy said, adding that the value-added tax reduction from 18 percent to 8 percent has also not been enough.

There is a need for new government regulations to trigger construction machinery sales, according to Aksoy. "Due to the crisis, exports dropped 43 percent during the first quarter of the year compared to a year earlier. Employment in the industry has also declined from 15,000 to 11,500. In the current conditions, we expect to end the year with 40 percent contractions. We have asked the finance minister to lower the VAT from 8 percent to 1 percent for the next three months," Aksoy said.