Summary
– Turkey is in negotiations with Chinese electric vehicle manufacturers BYD Co. and Chery Automobile Co Ltd. for factory investments to boost sales in Europe
– SAIC Motor Corp. and Great Wall Motor Co are also in separate negotiations with Turkey for potential investments
– The move would give Chinese car manufacturers easier access to the EU due to Turkey’s customs union agreement and its growing EV market
– Turkish government is trying to attract foreign investment in its manufacturing sector, leveraging its location between Asia and Europe
– TOGG, Turkey’s first domestic EV maker, is being protected from competition until it establishes itself in the market.
Article
Turkey is engaging in advanced negotiations with Chinese electric vehicle manufacturers in an effort to attract factory investments in the country. Minister of Industry and Technology Fatih Kacir revealed that talks are underway with companies like BYD Co. and Chery Automobile Co Ltd., as well as SAIC Motor Corp. and Great Wall Motor Co. These investments could potentially help the Chinese companies increase their sales in Europe, especially with Turkey being a major market on its own and having a customs union agreement with the EU.
The increasing popularity of electric vehicles in Turkey is evident, with EVs accounting for 7.5% of all car sales in 2023. The national energy market regulator anticipates a significant rise in the number of EVs in the country by 2025, with research indicating that the domestic share of EV sales may reach 30.4% by 2032. BYD Europe Managing Director Michael Shu has expressed plans for a potential second European plant, in addition to one already being constructed in Hungary.
This potential investment by Chinese firms in Turkey could help them avoid new import tariffs resulting from an EU investigation into state subsidies for Chinese EV makers. Additionally, Turkey has imposed extra taxes on most EVs produced abroad, further incentivizing foreign manufacturers to establish production facilities within the country. The Turkish government is also working to protect its first domestic EV maker, TOGG, from competition as it establishes itself in the domestic market.
Turkey’s strategic location between Asia and Europe, along with its customs union with the EU and advanced automobile industry, makes it an ideal base for exports into the European market. The country has seen significant growth in its vehicle exports over the years, with cars being among its top exports. Despite previous setbacks, such as Volkswagen AG dropping a planned factory investment following military actions in northern Syria in 2019, Turkey remains committed to attracting foreign investment in its manufacturing sector.
In addition to potential investments in EV production, Chinese firms in collaboration with TOGG are also constructing a battery plant in Bursa, Turkey. Kacir noted that opening a car plant in Turkey could provide privileged opportunities for battery investments as well. While a final investment decision has yet to be made, these talks between Turkish officials and Chinese manufacturers represent a significant opportunity for both parties to capitalize on the growing EV market in Turkey and Europe.
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