Turkey is expected to soon announce a deal with BYD to build a $1 billion factory in the country’s west, Turkish officials said, boosting the Chinese automaker’s presence in Europe amid escalating trade tensions.
Turkish President Recep Tayyip Erdogan is expected to announce the agreement on Monday at a ceremony in Manisa province, where the factory will be built, said the official, who spoke on condition of anonymity because he was not authorized to speak publicly. Representatives for BYD and the presidential office declined to comment.
The new factory will improve BYD’s access to the EU, which has a customs union with Turkey, which this week moved ahead with plans to impose temporary tariffs on electric vehicles imported from China, meaning BYD will be hit with an additional 17.4% tax on top of the current 10% rate.
They are also catering to the domestic market, with EVs accounting for 7.5% of car sales last year in Turkey, a country of about 90 million people.
Turkey said on Friday it was withdrawing plans announced nearly a month ago to impose an additional 40 percent tariff on all Chinese-made vehicles, citing a desire to boost investment. The decision came after President Erdogan and Chinese President Xi Jinping met on Thursday at a Shanghai Cooperation Organization meeting in Astana, Kazakhstan.
BYD has made great strides in China in recent years, becoming the country’s best-selling car brand. The Shenzhen-based manufacturer has vowed to bring low-cost electric vehicles to Europe in the next few years, including a Seagull hatchback that executives expect to sell for less than 20,000 euros ($21,700).
The company opened its first electric vehicle factory in Southeast Asia in Thailand on Thursday, has also bought a former Ford Motor Co. factory site in Brazil, is exploring sites for a factory in Mexico and is building its first European car factory in Hungary.
BYD’s sales surged to a record 982,747 vehicles in the second quarter, up more than 40 percent from the same period a year ago. The company’s sales in Europe have been sluggish so far, but the automaker has replaced Volkswagen AG as the main sponsor of the European Championship soccer tournament and is conducting a major marketing campaign there.
