CHINA REPORT
BYD has signed an agreement with the Turkish government to invest USD 1 Billion to build a factory in Turkey. This is BYD’s second factory in Europe following one built in Hungary. Under the agreement, BYD will build a factory and research and development center with an annual production of 150,000 vehicles. The factory is planned to start production by the end of 2026 and will provide job opportunities for up to 5,000 workers. The factory is expected to improve BYD’s logistics efficiency.
The Turkish government is welcoming the factory construction of Chinese automotive enterprises and is holding discussions regarding factory construction are taking place with SAIC and Great Wall, as well as BYD and Chery. Previously, Turkey announced the cancellation of a plan to impose an additional 40% tariff on all vehicles from China, which was announced a month earlier, to encourage Chinese automotive enterprises to invest in Turkey.
Additionally, the continuous growth in the sales of electric vehicles in the Turkish automotive market is also an attractive factor. By 2032, it is expected that the market share of electric vehicles in Turkey will exceed 30%.
Source: PCauto Read The Article
PSR Analysis: This move may help Chinese car manufacturers like BYD bypass protectionist measures and enter the vast European Union market, especially against the backdrop of the EU imposing additional tariffs on Chinese-made electric vehicles.
The Turkish automotive market has shown strong growth momentum in recent years, particularly in the field of electric vehicles. In 2023, the sales volume of pure electric vehicles in Turkey reached 66,000 units, accounting for 6.8% of the total sales volume, which is a significant increase compared to 1.2% in 2022. By 2032, it is predicted that the share of electric vehicles in Turkey’s domestic car sales will reach 30.4%. This rapidly growing market potential is highly attractive to Chinese electric vehicle brands. In recent years, the Turkish public has spoken highly of Chinese brands, and the more localized Chinese enterprises are in Turkey, the better the prospects for development.
The Turkish side believes that, due to its customs union agreement with the EU, Turkey is an ideal base for exporting to the EU market. At the same time, Turkey hopes to use tariff leverage to encourage Chinese companies to invest locally, thereby promoting the development of the country’s new energy automobile manufacturing industry. This strategy not only attracts foreign investment and creates jobs but also is expected to turn Turkey into an export base for automobiles targeting the EU and other neighboring regions. PSR
Jack Hao is Senior Research Manager – China for Power Systems Research
