Business Investment

VW postpones decision on $1.4 billion Turkey car plant

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Tuesday 15, October 2019 BY Kuda Muzoriwa

The German carmaker established a Turkish unit in the western city of Manisa earlier in October, paving the way to begin producing cars in the country.

Volkswagen (VW) has delayed a decision on a EUR 1.3 billion ($1.4 billion) auto factory in Turkey after the country’s military action in northern Syria prompted an international outcry, reported Bloomberg.

The plant postponement may come as a blow to President Recep Tayyip Erdogan and to Turkey, which counts Germany as its largest trading partner.

VW said that it is monitoring the situation and the car conglomerate is concerned about the current developments, adding that the decision to delay was made by the management board.

The plan to make 300,000 cars in Turkey, creating 5,000 jobs, would expand VW’s total number of factories worldwide to 123 and create a bridgehead to grow sales across Eastern Europe and the Middle East.

The world’s biggest carmaker has struggled to compete with Asian rivals in those markets because of high costs at its factories in Western Europe. VW also considered sites in Bulgaria, Serbia, Romania and North Africa.

Industrial giants Daimler, Siemens as well as Continental and Robert Bosch GmbH operate plants in Turkey, alongside other global manufacturers including Ford Motor and Toyota Motor.

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