Volkswagen (VW), has dropped plans to open a new factory in Turkey, blaming economic fallout from the coronavirus pandemic for the move.
According to the carmaker, the decision was as a result of collapse in global automotive demand caused by the coronavirus crisis.
Plans to launch a factory in the Western Turkish province of Manisa witnessed a setback, with Volkswagen having already set up a subsidiary in the country, but the expansion had been recently put on hold.
Volkswagen, however, put a halt on planned plant following Turkey’s military incursion into Northern Syria in October 2019, and amid criticism of the Turkish Government linked to human rights violations.
The Turkish subsidiary was entered into the commercial register in Manisa and has approximately 164 million dollars in capital.
The project had been expected to bring 4,000 jobs to the region.
However, a company spokesman said that, in today’s context, creating new capacity was not necessary. All planned vehicle projects were now to be manufactured at production facilities within the existing VW network.
Earlier, Volkswagen Group was seeking to expand production capacity for the core brand’s Passat model and the Skoda subsidiary’s Superb model.
The Manisa plant had been intended to produce up to 300,000 cars a year.
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