Chinese electric vehicle giant BYD will open a factory in Turkey, a government source told AFP on Monday, as the company continues its international expansion.
“BYD will open a factory in Turkey,” the source said, with details to be announced by President Recep Tayyip Erdogan.
The news comes days after the EU imposed additional provisional tariffs of up to 38 percent on Chinese electric cars after an investigation found that state subsidies were unfairly undermining European competitors.
Cars produced in Turkey have access to the EU thanks to a customs union dating back to 1995. The Marmara region around Istanbul has become one of the most important centres of the global automotive industry.
Major car manufacturers, including Fiat and Renault, opened factories there in the early 1970s. Ford, Toyota and Hyundai followed suit, taking advantage of Turkey’s location at the crossroads of Europe, Asia and the Middle East.
According to Turkish media, BYD would invest one billion dollars in the factory.
– Tariff free –
The land previously allocated to Volkswagen in Manisa, north of the western port city of Izmir, would be given to the Chinese company, the pro-government daily Yeni Safak reported.
“BYD is the world’s largest manufacturer of electric vehicles and one of the most advanced in terms of technology and manufacturing quality,” independent consultant Levent Taylan told AFP.
“This will indeed be an investment for the Turkish market, but especially for the European market, by circumventing the customs tariffs levied on vehicles of Chinese origin,” he said.
He said BYD has the potential to sell around 20,000 to 25,000 vehicles annually in the Turkish market and export 75,000 to the EU.
“A factory (in Turkey) with an installed capacity of 100,000 to 125,000 vehicles per year would be a reasonable investment,” he added.
New Turkish regulations on investment incentives allow BYD to avoid a new 40 percent import tariff imposed by Turkey on electric vehicle imports.
China is leading the world in the adoption of electric vehicles. According to the International Energy Agency’s annual Global EV Outlook, nearly one in three cars on Chinese roads will be electric by 2030.
Chinese electric car makers have also increased their exports, prompting many countries to take measures to protect their carmakers.
Possibilities for production abroad are also being explored. BYD, for example, has already announced plans to open its first European factory in Hungary.
In July, BYD opened a factory in Thailand.
The company, which dominates the domestic market, says the plant in Rayong, an industrial area southeast of Bangkok, can produce up to 150,000 vehicles a year.
Beijing warns EU tariff measure could trigger trade war.
for/rl
