Turkey will soon announce a deal with BYD Co. to build a $1 billion factory in western Turkey, according to Turkish officials. This move will enhance the Chinese automaker’s footprint in Europe amid rising trade tensions.
President Recep Tayyip Erdogan will likely unveil the agreement on Monday at a ceremony in Manisa province. Officials, who requested anonymity due to lack of authorization to speak publicly, disclosed the location of the planned plant. However, both BYD representatives and the president’s office declined to comment.
EU Tariffs on Chinese EVs
This week, the EU applied temporary tariffs on electric vehicles imported from China. Moreover, it imposed an additional 17.4% duty on BYD’s products to the existing 10% rate. Thus, the upcoming factory will enhance BYD’s entry into the European market, leveraging Turkey’s customs-union agreement with the bloc.
Moreover, the Chinese automaker will look to serve the domestic market. Notably, EVs made up 7.5% of car sales in Turkey last year. On Friday, Turkey reversed its recent intention to apply an extra 40% tariff on vehicles imported from China. Now, the country aims to promote EV investment. The move came after discussions between Erdogan and China’s President Xi Jinping on Thursday during a Shanghai Cooperation Organization meeting in Astana, Kazakhstan.
BYD’s Expansion Strategy
BYD has witnessed significant growth in recent years within China, emerging as the top-selling car brand in the country. The automaker plans to introduce its affordable electric vehicles to the European market in the upcoming years. This includes the Seagull hatchback, which executives expect to cost under €20,000 ($21,700).
On Thursday, the car manufacturer inaugurated its first Southeast Asia EV factory in Thailand. Also, BYD acquired a former Ford Motor Co. facility in Brazil. Furthermore, the company is evaluating potential sites for a manufacturing plant in Mexico. And its first BYD plant in Europe, located in Hungary, is under construction. In the Middle East, the automaker opened its first showroom in Riyadh, Saudi Arabia.
BYD achieved a new milestone, with sales reaching 982,747 units in the second quarter. It marks a surge of over 40% compared to the previous year. Despite modest sales in Europe, the company is intensifying its marketing efforts in the region. This includes replacing Volkswagen AG as a primary sponsor of the European Championship football tournament.
