On 2 October 2019, the Turkish Trade Registry Gazette announced that Volkswagen had established a joint-stock company in Turkey under the trade name Volkswagen Turkey Otomotiv Sanayi ve Ticaret Anonim Şirketi ("Volkswagen Turkey").
According to the Turkish Trade Registry Gazette, Volkswagen Turkey was incorporated to design, produce, assemble, sell, import and export automobiles, trucks and all kinds of motor and transport vehicles and their parts, and thecompany headquartered in Manisa has capital of TRY 943,500,000 (approximately EUR 150 million as of 2 October 2019). In addition, the two board members of Volkswagen Turkey are Jens Kellerbach and Jurger Unser.
The share price of Volkswagen’s distributor in Turkey had increased by nine percent (9%) by the end of the announcement day.
Volkswagen’s Investment as Evidence of Confidence in Turkey
In the last fifteen (15) years, Turkey has become an important production site for the automotive sector. The growing enterprise network of industrial suppliers and low-cost labour are great advantages to manufacturing companies. World-leading auto manufacturers including Fiat, Ford, Hyundai, Mercedes, Renault, and Toyota also carry out production activities in Turkey. According to data of the Turkish Exporters’ Assembly, Turkey’s automotive industry exports totaled USD 31.57 billion in 2018.
This latest investment in Turkey of Volkswagen has been interpreted as an indication of increasing trust in the Turkish economy. With the expected judicial reform package, Turkey intends to fully benefit from its geographical advantage with a more developed legal system.
Volkswagen had made public its intention to build a new facility either in Turkey or Bulgaria. Reuters stated that a board member of VW told reporters last week that the company is nearing a decision on building the new plant in Turkey. The establishment of Volkswagen Turkey Otomotiv Sanayi ve Ticaret A.Ş. is regarded as a demonstration that this investment will be made in Turkey. According to Bloomberg, the planned facility would have an annual production capacity of around three hundred thousand (300,000) units, and the multi-brand factory would cost more than EUR one (1) billion.
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