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Turkish Defence & Aerospace Industry 2020 Q1 Performance: Exports Drops %21.5!

Date: April 09, 2020

Turkish Defense & Aerospace Industry’s exporting companies have started to felt initial impact of the coronavirus (COVID-19) outbreak in March 2020, after achieving 5% increase during the first two months of 2020, as exports dropped 49,8% in March compared to 2019.

It is clear that the coronavirus outbreak, declared as a worldwide pandemic on March 11, 2020 by the World Health Organization (WHO), will certainly have negative effects in the short to long term on defense exports not only in Turkey but also on a global basis. It is widely accepted that the coronavirus pandemic has revealed the fragility of the production and supply chains on a global scale. After first appearing in the Chinese city of Wuhan in December 2019, the COVID-19 has spread to at least 190 countries around the globe. According to WHO data as of April 5, 2020 the global death toll from the COVID-19 has hit 62,784 with 1,133.758 confirmed cases.

Turkey’s general exports have also choked by the COVID-19 pandemic during March 2020. According to Trade Ministry data revealed on April 2, 2020, in March Turkey’s exports shrank 17.8% compared to 2019, reaching US$13.4 Billion. According to Trade Ministry, the quarantine restrictions enacted at the borders, especially with neighboring countries Iraq and Iran, and market and demand shrinkage in EU states were the main culprits of the decline in exports in March 2020. The annual around 18% decrease in Turkey's exports reflects the impact of the spread of the COVID-19 on key sectors of the economy. Spoke at the press meeting on April 2nd, Head of Turkish Exporters’ Assembly, İsmail GÜLLE, stressed that exports to 83 countries increased in March 2020 “despite the negative outlook in global trade.” According to GÜLLE, Turkey’s top export markets in March were Germany (US$1.3 Billion), the U.S. (US$880 Million) and the U.K. (US$802 Million).  Meanwhile, Turkey’s top exporting industries/sectors have maintained their chairs in March 2020. According to GÜLLE, the Automotive, Chemicals and Textile sectors have achieved a total exports of around US$2,6 Billion, US$1,6 Billion and US$1.2 Billion respectively.

According to export figures revealed by the Turkish Exporters’ Assembly (TIM), on April 2nd, 2020, the Turkish Defence & Aerospace Industry’s exports have dropped around 21.5% during the first three months of 2020 compared to the same period last year, as the coronavirus (COVID-19) pandemic leads to a decline in trade with some of its biggest partners. According TIM data, during January 1st – March 31st of 2020, the Turkish Defence & Aerospace Industry exported a total of around US$482,676 Million, while the said figure was at around US$614,718 Million level in the same period of last year.

According to data released by the TIM, the Turkish Defence & Aerospace Industry realized US$$166,936 Million in defence and aerospace equipment exports in January, US$173,922 Million in February and US$141,818 Million in March. The total weight of products exported by the Turkish Defence & Aerospace Industry in March is around 2,845 tons. It was 3,102 tons in February and 2,818 tons in January.

Meanwhile, according to Haluk GÖRGÜN, the CEO of Aselsan, the largest defence electronics company in Turkey and one of the 100 largest defence companies (52nd in 2019) in the world, continuing its growth trend the company has secured US$320 Million worth of new orders during the first three months of 2020.

According to TIM figures the list of the top 15 countries that imported defence and aerospace products from Turkey during January 1st - April 31st of 2020 is composed of; the USA, Germany, UAE, India, the Netherlands, the UK, Qatar, Indonesia, Saudi Arabia, France, Azerbaijan, Chile, Poland, Bahrain, and Malaysia.

With a total of around US$197,768 Million (represents a 3,85% increase compared to 2019) in purchases United States was the largest recipient/importer (mainly military and civil helicopter and aircraft parts, and component sales realized under offset commitments), followed by Germany with US$59,917 Million (represents a 4,18 decrease compared to 2019), UAE with US$26,186 Million (represents a 59,45 increase compared to 2019), India with US$24,007 Million (represents a 161,13 increase compared to 2019), the Netherlands with US$21,491 Million, the UK with US$14,578 Million (represents a 20,61 decrease compared to 2019), Qatar with US$12,785 Million (represents a 58,06 decrease compared to 2019), Indonesia with US$11,724 Million (represents a 3689% increase compared to 2019), Saudi Arabia with US$11,664 Million, France with US$9,008 Million, Azerbaijan with US$8,623 Million (represents a 27,51 decrease compared to 2019), Chile with US$7,762 Million (represents a 4,249 increase compared to 2019), Poland with US$7,164 Million, Bahrain with US$5,932 Million and Malaysia with around US$5,146 Million (represents a 223% increase compared to 2019).

According to TIM’s figures during January 1st - March 31st of 2020, Turkish Defence & Aerospace Industry has exported US$203,258 Million (represents 3,27% increase compared to 2019) worth of defence and aerospace equipment to the North America/USA, US$127,698 Million (represents 10,73% decrease compared to 2019) to the EU Member Countries, US$6,151 Million to other European countries (represents a 86,95 increase compared to 2019), around US$62,818 Million (represents around 72,34% decrease compared to 2019) to the Middle East countries, US$15,525 Million to Commonwealth of Independent States (CIS), around US$30,220 Million (represents a 178,76 increase compared to 2019) to other Asian countries, around US$2,767 Million (represents a 28% decrease compared to 2019) to Africa countries and around US$21,281 Million (represent 191,27% increase compared to 2019) to Far East countries.