Domestic mobile phone production in Turkey is facing a significant contraction due to recent economic and sectoral difficulties. MOBISAD President Mustafa Kemal Turnacı announced that 3-4 companies have decided to completely cease production activities in the last two to three months.

This decline in domestic mobile phone production is noteworthy due to its impact on the future of the sector and employment. Sector representatives are calling for urgent measures to revive production.

Loss of Market Share in Domestic Production

Turnacı, in a statement to Bloomberg HT, recalled that approximately 1.5 years ago, the share of domestic production in the mobile phone market had risen to around 65 percent. He emphasized that protecting existing investments is critical not only for production activities but also for retaining engineers and qualified human resources trained in Türkiye in the sector.

Turnacı stated that domestic production should not be seen as consisting only of assembly activities, and underlined that processes starting with assembly can eventually transform into the ability to develop higher value-added technologies. Stating that the sector should not be evaluated solely based on imports, Turnacı noted that the mobile phone sector provides approximately 170,000 direct and 800,000 indirect jobs.

Reminding that there are over 20,000 retail sales points throughout Turkey, the MOBİSAD President stated that the contraction in domestic production directly affects employment. Steps taken to protect investments are considered to be of great importance for the long-term sustainability of the sector.

Expectation of surveillance and payment installment regulations

Among the main reasons for the contraction in domestic mobile phone production, the surveillance value applied to imports and the installment payment restrictions on mobile phone sales stand out. Turnacı stated that raising the surveillance value to $200 in 2020 made it attractive to produce entry-level phones in Turkey, but this effect has diminished over time.

Turnacı described the increase in the surveillance value to $250 as a positive but insufficient step, arguing that raising the price to the $300-400 range could make domestic production attractive again. Emphasizing that production investments have already been made, Turnacı said that with improved conditions, some products could be produced in Turkey instead of being imported.

Turnacı also touched upon the issue of financing in mobile phone sales, saying that installment restrictions make it difficult for consumers to access registered sales channels. He stated that the current installment limit of 20,000 TL should be removed if possible, or raised to the 40-45,000 TL range.

Turnacı, arguing that such a regulation would not directly increase imports, stated that discussions with the relevant institutions are ongoing. What are your thoughts on the future of domestic production and these changes in the sector?