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Turkey’s ship and yacht exports dropped sharply in March as rising production costs and limited access to financing disrupted the industry, according to data released by the Turkish Exporters Assembly (TİM).
Shipyard exports plunged 40 percent from a year earlier to $86 million in March 2025, decreasing by 27.5 percent in the first quarter, totaling $328 million.
The decline made shipbuilding the worst-performing industrial export sector in Turkey during this period.
Turkey’s shipbuilding industry had previously posted strong growth, with exports rising 33 percent to $1.94 billion in 2023. During that year Turkish shipyards overtook China in tugboat manufacturing and maintained global leadership in fishing boat construction.
The industry boasts premium export values, with products averaging $20 per kilogram and specialized vessels like tugboats reaching $30 per kilogram.
Rising production costs now match those in Norway, Turkey’s largest ship export market. In the Turkish shipbuilding sector, these rising production costs stem in particular from increases in raw material prices and wages, while financing difficulties due to fluctuations in exchange rates and challenges in obtaining credit are blocking new orders. This coincides with growing global demand for environmentally friendly vessels, leaving Turkish shipyards struggling to secure new orders.
Despite these challenges, the sector’s exports contracted just 1.4 percent in 2024, closing at approximately $1.9 billion due to ongoing projects.
The industry’s workforce has shrunk nearly 10 percent over the past seven months across more than 80 active shipyards.
Some companies have begun relocating overseas to maintain competitiveness. Tersan, a leading exporter, invested in Norway, while Hicri Ercili established operations in the Netherlands.
Industry leaders have revised export forecasts downward for Turkey’s shipbuilding sector. Cem Seven, chairman of the Ship, Yacht and Services Exporters’ Association (GYHİB), told the Ekonomim news website that order declines continue to rise, projecting a drop of more than 15 percent in year-end exports.
“We continually face new challenges,” Seven said. “Most recently, the imposed maximum monthly increase of 0.5 percent on foreign currency loans has driven up foreign loan interest rates and slowed credit availability.”
Industry experts identified four key factors eroding Turkish shipyards’ competitiveness: production costs reaching European levels, suppressed exchange rates not keeping pace with inflation, financing difficulties and the removal of VAT exemption on vessels under 24 meters built for export.
The country has also lost its competitive edge in the Mediterranean region’s ship maintenance and repair sector.
“Our shipbuilding production costs have matched those of Norway, and we have also lost competitiveness in maintenance and repair,” said Başaran Bayrak, Turkish Exporters Assembly board member and GYHİB deputy chairman. “International vessels are now opting for Bulgaria, Greece and Romania instead of Turkey.”
The Turkish shipbuilding sector’s annual service exports, estimated between $1.5 billion and $2 billion, are also under threat.
Bayrak reported approximately 25 percent less business volume in the first quarter and warned that moderate job losses could worsen in coming months.
“Major investments by leading maritime groups like Beşiktaş, Kaptanoğlu and Kalkavan had previously established Turkey as a regional leader in ship maintenance and repair,” he said.
GYHİB Chairman Seven cautioned that continued losses might drive more Turkish companies to relocate investments overseas, following industry leaders Tersan and Hicri Ercili.