BYD plans plant in Turkey - loophole for punitive tariffs?
China's automotive giant BYD is reportedly opening another factory outside of the home market, with the European market once again in sight. The planned factory in Turkey could help mitigate at least some tariff consequences.
According to Turkish government sources, the Chinese electric vehicle manufacturer BYD is planning to open a factory in Turkey. The project is expected to be announced publicly by Turkish President Recep Tayyip Erdogan, according to Turkish media reports. No specific date for this announcement has been mentioned yet.
Turkish media reports suggest that the investment will amount to a billion dollars (approximately 0.9 billion Euros). BYD, the world's largest manufacturer of electric vehicles, opened a factory in Thailand just last week. According to the company, up to 150,000 cars can be produced annually near the Thai capital Bangkok. The company also has plans for locations in Hungary and Brazil.
The European Union recently imposed additional provisional tariffs on Chinese electric vehicles. The background to this decision were allegations that Chinese vehicle manufacturers profit from comprehensive subsidies, which comes at the expense of European manufacturers. However, vehicles produced in Turkey enjoy improved access to the European market due to a customs union dating back to 1995.
BYD has been the world's largest manufacturer of electric vehicles since the end of last year. The company based in Shenzhen, China, was founded in 1995 and initially produced batteries. It entered the automobile production industry in 2003. Today, the company specializes in hybrid and electric vehicles. BYD reported a record profit of 30 billion Yuan (approximately 3.8 billion Euros) in the previous year. However, the company lowered its sales expectations for the current year in April. In China, there is an intense competition between over a hundred manufacturers and a correspondingly fierce price war.
- Despite the EU imposing punitive tariffs on Chinese carmakers due to subsidy allegations, Chinese car manufacturer BYD, such as itself, benefits from improved access to the European market through the customs union with Turkey.
- With the EU imposing additional tariffs on Chinese electric vehicles, BYD, the world's largest maker of EVs, decides to expand its production outside of China, setting up a factory in Turkey, as reported by Turkish media.
- The announcement of BYD's factory opening in Turkey by President Erdogan is anticipated soon, as the Chinese car manufacturer looks to diversify its market and potentially minimize the impact of punitive tariffs on its economy.
