Volkswagen AG established a Turkish unit in the western city of Manisa, according to notice published on Turkey’s trade registry gazette yesterday.
Volkswagen Turkey Otomotiv Sanayi ve Ticaret AS will design, manufacture and assemble motor vehicles, according to the notice. The company has a capital of 943.5mn liras ($164mn).
The notice follows reports in German and Turkish media about talks on a new car factory in Turkey that will cater to the domestic market and serve as an export hub for the Middle East and Russia.
The site, which would expand VW’s total number of factories worldwide to 123, will bundle production of the VW Passat and Skoda Superb mid-sized sedans in a move to 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 due to high manufacturing cost at its factories in Western Europe.
Shares of Dogus Otomotiv, the distributor of Volkswagen vehicles in Turkey, rose as much as 4.1% to 8.14 liras in Istanbul trading, reversing earlier losses.
Beyond the strategic rationale for VW, the project also marks a win for Turkey’s government led by President Recep Tayyip Erdogan in attracting foreign investment.
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