Volkswagen cancelled Turkey plant for ‘political reasons’, says CEO

Herbert Diess, CEO of German automotive giant Volkswagen, said the company had abandoned plans to open a new factory in Turkey over political reasons, Euronews Turkish reported on Friday.

“I was in favour of opening a factory there, I still am,” Euronews cited Diess as telling German economy journal WirtschaftsWoche in an interview. “We could have opened the new factory in Turkey, and contribute to the improvement of conditions there.”

Diess told WirtschaftsWoche that Volkswagen’s works council had stood against the Turkey plant, and that shareholders had concerns over the political climate in the country.

Turkey is not a country that Europe can dismiss strategically, Diess said, but the executive board could not go further without the works council’s support.

“My thoughts on Turkey differ from those of the EU and the German government,” the CEO added. “We could integrate Turkey to the EU, and thereby enhance our power in that country.”

The Volkswagen Group announced in July that it was abandoning plans for a factory project in Turkey’s western Manisa province. The official reason for the cancellation of the € 1 billion ($1.2 billion) investment was low demand due to the coronavirus pandemic, as announced in a statement.