Turkey is changing from a popular outsourcing location to a lucrative sales market for the Textile Industry. Due to the historical connection of the nations, this is especially an opportunity for German textile companies.
Turkey was once the sewing workshop of Europe. Because of low wages companies from the textile and garment sector use the country preferred to outsource their production. However, today the country is far more than just a popular destination for cost-effective production. Due to its dynamic population development, a very favorable economic situation and geographical proximity with an excellent connection to Central Europe, Turkey is a close and interesting market for German clothing companies. The Turkish economy is nowadays on a high technological level. This also increases the demand for special fabrics, high-tech fabrics and special equipment for the manufacturing industry. In the growing, modern, informed and globalized middle class there can be found the ideal consumer for the high-quality products of the German garment industry.
Another advantage is the historical link between Germany and Turkey. In Germany a comparatively high proportion of Turkish citizens live as a result of the massive immigration of Turkish guest workers in the 1960s. This is generating constant exchange between the countries, and let rise a favorable environment for the establishment of German brands. It’s not a surprise, that many German labels are already well-known and popular in Turkey.
Still attractive for production
Nonetheless, Turkey remains attractive as a country for production. The regulation of the market complies broadly with the European rules, which means that the German entrepreneurs are in a particularly favorable position, especially in comparison to locations in the Far East. In addition, the government promotes foreign investment through various programs, tax breaks and relaxing of regulations. Hugo Boss has been producing clothing in his Turkish factory in Izmir since 1998. With a workforce of more than 3,500 employees, the company is nowadays one of the largest employers in the Aegean region. The German manufacturers have already completed the structural change that has been going on in Turkey in the 1970s and 1980s. In terms of reacting to low-cost competition, Germany is an idol for Turkish companies.
Despite these advantages, the Turkish market has been neglected by German textile companies in recent years compared to other regions, such as China. Against the backdrop of slowing growth in the Far East and the need to constantly develop new markets, companies in the industry should now consider whether the expansion into Turkey can be a welcome chance for their own Businesses.