Volkswagen in talks with Turkey to open $2.3 billion plant – report

Volkswagen Group is in talks with Turkey to spend as much as $2.3 billion on its first production facility in the country, Frankfurter Allgemeine Zeitung (FAZ) reported.

Chief executive Herbert Diess visited Turkey last week to discuss details. The company confirmed that Turkey was one of two locations under consideration; the other being Bulgaria, FAZ correspondent Christian Geinitz said.

"Certainly, Turkey would be an attractive location for a new production facility of the Volkswagen Group," a VW spokesman said, according to FAZ. There are "concrete negotiations" and "high-level talks".

Volkswagen may build the facility on 40 hectares of land near Izmir, Turkey’s third-largest city, the newspaper said. Opel was resident there until 2001.

Investment costs are estimated at between 1.3 billion euros ($1.5 billion) and 2 billion euros, FAZ said. The Turkish government has offered support totalling 100 million euros, it said.

Volkswagen already has a positive experience of producing vehicles in Turkey through bus-maker MAN, the company spokesman said. The factory is known for “the highest quality standards and delivery reliability,” the spokesman said.   

Volkswagen Group is the only one of six top motor vehicle suppliers in Turkey that doesn’t produce there; the others being Renault, Fiat, Ford, Toyota and Hyundai, FAZ said. It sold almost 67,000 cars in the country last year, it said.