Summary by News About Turkey (NAT):
BYD’s recent $1 billion investment in Turkey represents a significant step in China’s push toward European markets. The project, which includes the production of 150,000 electric and hybrid vehicles in Manisa and an R&D center in Izmir, strengthens Sino-Turkish economic ties and positions Turkey as a key supply corridor for European EV markets. BYD’s investment enables the company to bypass EU tariffs on Chinese EVs, taking advantage of Turkey’s customs union with the EU. This deal highlights Turkey’s growing automotive sector and poses challenges for EU trade policies.
BYD’s strategy not only aims at expanding its manufacturing capabilities in Turkey but also focuses on exploiting Turkey’s geographical and political connections to Europe, the Middle East, and beyond. By investing in Turkey, BYD gains pricing advantages and avoids the rising tariffs that have been imposed on Chinese-manufactured EVs in the EU. Turkey’s suspension of its 40% import tariffs on Chinese EVs as part of the deal further enhances the attractiveness of this partnership for both parties.
From Turkey’s viewpoint, this joint venture represents a substantial triumph for President Erdoğan’s industrial strategies, attracting essential foreign direct investment and strengthening the nation’s automotive industry. BYD’s investment is the most substantial Chinese foreign direct investment in Turkey over the last ten years, which will enhance production and foster technological progress within the Turkish automotive supply sector.
This strategic move also puts pressure on the European Union to rethink its trade policies with non-EU countries like Turkey, particularly in the context of modernizing the EU-Turkey customs union. As China expands its electric vehicle market through investments in Turkey and Hungary, the EU faces the challenge of balancing protectionist measures with the need to adapt to evolving global trade dynamics in the automotive industry.
Read the full article here.
