Volkswagen Group is exploring the assembly of Chinese-developed vehicles in Turkey to build export volume as its sales in China plunge.
VW Group and Turkish automotive distributor Dogus Otomotiv have signed an agreement covering the planned production, according to Automobilwoche, a sister publication of Automotive News Europe.
The project would help VW to leverage excess capacity in China while expanding exports to markets where combustion-engine vehicles remain in demand.
The partners plan to assemble VW models developed in China using the completely knocked-down (CKD) process, under which vehicles are shipped as disassembled kits and reassembled locally.
Dogus Otomotiv confirmed on Oct. 30 that it had signed a letter of intent with VW Group to explore options for producing VW-brand passenger cars in Turkey. Dogus said the partnership aims to offer value-added products suited to new technologies in the Turkish market and contribute to growth in the Turkish auto industry.
Dogus did not disclose the vehicles earmarked for production in Turkey. Automobilwoche sources said the project involves models produced by VW Group’s joint venture with China’s FAW Group.
VW Group declined to comment.
FAW-Volkswagen builds several models for the Chinese market, including the Magotan, a local version of the Passat midsize sedan, as well as Jetta and Audi vehicles. The joint venture has shipped VW- and Jetta-branded gasoline models to the Middle East and Central Asia. It said on Sept. 11 that it had started exports to Madagascar.
The planned Turkish operation is another step in VW’s push to turn its China factories into an export base as local demand weakens and competition intensifies. VW Group’s deliveries in China fell 30 percent to 1.38 million vehicles in the first nine months, the automaker said on Oct. 29. VW said internal combustion engine vehicle segments were especially hit by the sales slump.
VW Group has increasingly shifted away from its long-standing “In China, for China” strategy toward an approach it describes as “In China, beyond China.”
The automaker does not currently manufacture vehicles in Turkey. VW abandoned plans for a factory in the country in 2020, citing the COVID-19 pandemic and global economic uncertainty.
About 630,000 new cars were registered in Turkey through September. Internal-combustion vehicles still dominate the market, accounting for about 80 percent of registrations, while electric vehicles represented just under 20 percent.
Reuters contributed to this report
