The transformation in trade and changing market dynamics are steering the machinery sector toward a more selective and value-added structure. Zülfikar Kılıç, Secretary General of the Machine Manufacturers Association (MIB), stated that the year 2025 clearly demonstrated the resilience and agility of the Turkish machinery industry, noting: “The Turkish machinery sector has made an approach that prioritizes delivery time, supply security, and service quality over price more visible.”

The machinery industry continues to be one of the fastest-responding sectors to global trade shifts and economic fluctuations. As the transformation in export structures, domestic market vulnerabilities, and geopolitical developments reshape the industry’s trajectory, factors such as cost pressures, access to finance, and shifting market dynamics are pushing manufacturers toward more selective and value-added strategies. In this context, we discussed the current state of the sector and expectations for the future with Zülfikar Kılıç, Secretary General of the Association of Machinery Manufacturers (MIB).

  • How was 2025 for the Turkish machinery sector? What kind of outlook has the first quarter of 2026 revealed for the sector?

The year 2025 was a year in which our machinery industry clearly demonstrated its resilience and ability to pivot. Our total machinery exports, including free zones, closed the year at 28.7 billion dollars, providing a 1.9 percent increase compared to the previous year. The average export price per kilogram rising to 8.1 dollars, the highest level of all time, shows that our product mix has shifted toward areas containing higher engineering and added value. During the same period, machinery imports rose to 45.6 billion dollars, and the export to import coverage ratio stood at 62.6 percent. Our exports to Germany reached 3.2 billion dollars with a 6.8 percent increase, while exports to the USA reached a level close to 2 billion dollars with a 9 percent increase. In contrast, significant revenue losses were experienced in markets such as Russia and Iraq. Regarding the first quarter of 2026, we currently have clear data for the first two months, and these figures show that the structure formed in 2025 is continuing. In the January to February period of 2026, machinery exports excluding free zones rose to 3.8 billion dollars, and 4.4 billion dollars including free zones; a 4.5 percent increase in value and a 10.6 percent decrease in quantity were observed. The average unit price reached 8.8 dollars per kg, surpassing the 2025 average. While Germany maintained its first place with 561 million dollars and a 14.9 percent increase, exports to the USA rose to 370 million dollars with a 57.6 percent increase. There is also a 16.4 percent increase in Italy. Conversely, the decline continues in markets such as Russia, Spain, and Poland. This outlook tells us that 2026 has been entered with a focus on quality, price, and selected markets rather than volume.

“Clients are acting more cautiously regarding new facility investments”
  • What kind of outlook is emerging in the sector’s production, export, domestic market, and order structure lately?

A more selective and higher value-added structure is forming on the export side. In the first two months of 2026, internal combustion engines and parts, construction and mining machinery, pumps and compressors, turbines, turbojets, hydraulic systems, and tractors or agricultural machinery stood out. Specifically, value increases of 40.7 percent were recorded in turbines, turbojets, and hydraulic systems, 19.5 percent in tractors and agricultural or forestry machinery, and 12.9 percent in pumps and compressors. There is also a significant change in the order structure; clients are acting more cautiously regarding new facility investments and are turning toward modernization, revision, and service solutions that make their existing machinery park more efficient and smarter. This is why after-sales service, integration, and engineering support have become more decisive in competition.

“The machinery sector was able to maintain its export revenue”
  • How are economic developments and uncertainties affecting the machinery sector?

The machinery industry is a sector far more sensitive to monetary policy changes and the investment climate than the general manufacturing industry. This is because our product is a capital good; orders, financing, investment appetite, and a sense of confidence are inseparable. Our sector was able to maintain its export revenue, but it did so through price and product mix rather than volume increase. This can be identified as an indicator of resilience. Indeed, the assessment that especially the first half of 2026 will be challenging in terms of profitability, cash flow, and order continuity stems from this.

The situation in Europe is also a significant factor. Eurozone manufacturing PMI data continues to be weak; fixed capital formation and the general manufacturing sector in Germany have been under pressure for three years. As VDMA data suggests, orders for defense, infrastructure, energy, and large-scale enterprise investments are showing more resilience; however, the general industrial investment appetite remains sluggish. For us, this indicates that instead of a broad-based revival in demand, activity will move more selectively within areas deemed strategic.

“We observed the most significant impact in Russia”
  • What have been the repercussions of the ongoing wars and geopolitical tensions on the sector, and have any measures been taken regarding this situation?

Throughout 2025, geopolitical tensions directly impacted the market composition of our sector. We observed the most significant impact in Russia. According to MAIB’s 2025 year-end data, the negative impact of trade restrictions with Russia reached 700 million dollars. A contraction of 9.8 percent and a revenue loss of 70 million dollars were also experienced in Iraq. In contrast, the 189 percent surge in machinery exports to Syria, reaching 130.6 million dollars, demonstrated that the need for reconstruction and infrastructure in certain nearby regions has created new areas of demand. Our companies have recently accelerated their market diversification; while increasing our weight in main markets such as Germany, the USA, and Italy, we have also sought to strengthen our presence in alternative markets like Egypt, Morocco, Ukraine, and the UAE. On the other hand, the Turkish machinery sector has made an approach that prioritizes delivery time, supply security, and service quality over price more visible.

As MIB, we have consistently kept the new risks facing the sector on the agenda before both public institutions and our international counterparts. However, the conflicts that broke out between Iran and the USA and Israel have revealed a new wave of instability that impacts not just our Middle Eastern markets but the entire world. In this context, it is clear that geopolitical tensions are no longer a temporary deviation but a permanent element of the new trade order; therefore, the measures taken must be structural, not temporary.

“We have systematically conveyed the pressures facing our sector to all relevant institutions”
  • What are the current practices and ongoing initiatives directed at the machinery sector in the fields of legislation, support mechanisms, and financing?

For the machinery industry, the most critical need today is to address trade policy, industrial policy, and financing instruments within the same strategic framework. As MIB, we have systematically conveyed the pressures facing our sector to all relevant institutions, primarily the Ministry of Trade and the Ministry of Industry and Technology. In this context, our three-legged approach is clear: strengthening import controls, the selective use of additional customs duties and similar trade policy instruments, and the activation of market surveillance and inspection. As MIB, we view these measures as legitimate and necessary tools to protect domestic production and technological competence.

The instruments provided to exporters through Eximbank and public banks are valuable. Our expectation is the implementation of tax, credit, and guarantee mechanisms that will make the use of domestic machinery more advantageous for the investor in the new period; and for green and digital transformation investments, the more intensive channeling of international development finance instruments toward the machinery industry. We believe that a holistic industrial and financing approach, handled on the axis of competitiveness, is the most critical tool for re-strengthening the production power of the machinery sector.

“At the end of 2025, machinery imports from China reached 12.8 billion dollars with a 15.7 percent increase”
  • How do you evaluate China’s impact on the machinery sector in recent years? What have been the repercussions of this situation for Türkiye, and what steps need to be taken to protect and strengthen the sector’s competitiveness?

Describing China’s impact merely as “low-cost product pressure” is no longer sufficient. The issue has transformed into a form of competition where scale, financing, speed, standardized modular production, and strategic industrial policies are all deployed simultaneously. For Türkiye, the clearest indicator of this landscape is the concentration of China in machinery imports. At the end of 2025, machinery imports from China reached 12.8 billion dollars with a 15.7 percent increase. Its share within total imports has risen to 27.8 percent, a level that must be monitored closely from a strategic perspective. January 2026 data also shows that China is by far the country with which the largest machinery trade deficit is experienced. In January, our exports to China were 21 million dollars, while our imports from China were 1.15 billion dollars; the export-to-import coverage ratio remained at a mere 1.8 percent.

As MIB, we advocate for a three-legged approach here: the strengthening of import controls, the faster and more selective use of additional customs duties and other trade policy instruments, and the operation of market surveillance and inspection in a deterrent manner. In addition, there is an absolute need for financing and incentive models that will make the choice of domestic machinery more advantageous for the investor. In other words, the China issue is not just a “tax” issue; it is also an issue of industrial policy, financing, and protecting domestic production capacity.

“We  see digitalization as a natural extension of our export model and our way of doing business”
  • How do the topics of sustainability and digitalization rank on the agenda of the machinery sector today?

Today, sustainability and digitalization in the machinery industry are no longer a “side agenda” but the direct center of competition. Topics such as energy efficiency, emissions, product life cycle, resource use, digital traceability, remote service, data collection, and process optimization have become an inseparable part of purchasing decisions, especially in the European market. For this reason, the Turkish machinery industry is increasingly turning toward solutions that are energy-efficient, digitally controlled, data-producing, and that establish long-term relationships with customers on the maintenance and service side. As MIB, we consider it important that our members view this transformation not just as regulatory compliance but as an opportunity for accessing new markets and generating higher added value. This topic will be decisive for both our integration with Europe and our competitiveness in the domestic market. The same applies to digitalization. A machine is no longer just a mechanical product; it is a solution package along with control systems, sensors, software, data management, and service infrastructure. The fact that global investments are shifting toward making existing machines smarter, more efficient, and flexible rather than building new capacity requires us to increasingly think of the machine alongside service and software components. Therefore, we see digitalization not just as in-factory automation, but as a natural extension of our export model and our way of doing business.

“Exporters in Türkiye have made significant progress in terms of digital integration”
  • To what extent can the Turkish machinery sector adapt to machinery safety standards being reshaped by robotics and artificial intelligence?

The Turkish machinery sector, especially regarding firms that export and base their operations on working with Europe, is no stranger to this transformation. Today, topics such as robotics, AI-supported inspection, smart control, remote monitoring, cybersecurity, data integrity, and functional safety are becoming inseparable parts of classical machinery safety. Exporter and institutionalized machinery manufacturers in Türkiye have made significant progress in terms of technical regulatory compliance, CE marking, product safety, and digital integration. Indeed, for capital goods, financing opportunities, market access, technical regulatory compliance, and supply security have become as important competitive factors as price. This shows that the sector is already living with these topics. Particularly in SME-scale enterprises, the need for support regarding compliance with standards, certification, software-electronics integration, and qualified human resources continues. What needs to be done here is not to postpone the rules, but to make the training, testing, certification, and investment supports, which will accelerate companies’ adaptation to this transformation, more accessible. As MIB, we believe that compliance with safety standards is not only a condition for export but also the basis for the sector’s prestige and long-term competitiveness.

“Woodworking machinery is one of the important niche areas of our machinery industry in terms of engineering and application diversity”
  • How would you define the position and current status of the woodworking machinery sector within the general machinery sector?

Woodworking machinery is one of the important niche areas of our machinery industry in terms of engineering and application diversity. As this sub-sector simultaneously requires mechanical design, automation, precision machining, software, safety, and service capacity, it is actually an indicator that reflects the competency level of our general machinery industry very well. The fact that it serves many chains such as furniture, panels, doors-windows, building materials, and interior applications also makes this field strategic.

Most of the fundamental trends we observe in the general machinery industry today also apply to woodworking machinery; higher automation, more software integration, energy efficiency, occupational safety, digital monitoring, and servitization. At the same time, because this field is sensitive to domestic investment cycles and European demand conditions, it quickly feels fluctuations in financing and demand. This is why we view the woodworking machinery industry as a vital part of our general machinery ecosystem, one that both holds export potential and mirrors our technological transformation capacity. As MIB, our approach evaluates this sub-sector within the pillars of competitiveness, standards compliance, domestic production capacity, and international integration across the entire machinery industry.