2024-07-10 14:00:00
On Monday, July 8, Turkey declared that it would welcome BYD’s new production site to its lands. This announcement comes after an agreement between the Chinese group and the country signed by Fatih Kacir, Minister of Industry and Technology of Turkey, in Istanbul, under the eyes of President Recep Tayyip Erdogan. So BYD has committed to invest a billion dollars in Turkey to build a research and development center as well as a new factory capable of producing 150,000 hybrid and electric cars per year. It should take place on land offered by the state, located in Manisa province, near the coastal city of Izmir.
A new step in the rise of BYD
Founded in 1995, the Chinese group first specialized in the production of electric batteries, before expanding its activities to the automotive sector in 2003. Since then, BYD has become the largest Chinese automobile manufacturer. The group has exponential growth, with more than 3 million vehicles sold in 2023, or 61.9% more than in 2022.
A performance that made it the leading seller of electric cars in the last half of 2023, ahead of Tesla. If the American manufacturer managed to regain its leading position in the first quarter of 2024, the Chinese company plans to continue its rise. And this is related to its growing internationalization: on July 4, 2024, BYD established its first factory in Thailand, after announcing at the end of 2023 the creation of the first production site on European territory, in Hungary.
Circumvention of European customs duties
By setting up in Turkey, the Chinese manufacturer is strengthening its presence in Europe, where it plans to conquer the market. However, the European Union (EU) has recently put obstacles in the way of Chinese car groups: since July 5, the tax on BYD electric cars imported from China has increased from 10% to 17.4%. An increase that reflects the EU’s desire to prevent the flooding of its market by Chinese electric vehicles that benefit from significant subsidies.
By establishing itself in Turkey, BYD is bypassing this shield: since 1995, the European market has been opened by a customs union for cars produced in Turkey. In addition, the country exempts Chinese investments on its territory to encourage them. A welcoming terrain for the Chinese car manufacturer, who will also benefit in Turkey from a qualified, cheap workforce already familiar with the car industry, since the country has welcomed manufacturers such as Renault, Ford and Toyota since the 1970s.
BYD’s Turkish factory is expected to be operational by the end of 2026 and create up to 5,000 local jobs. It will also strengthen Turkey’s place in car production, as the country is today the third largest car manufacturer in Europe.
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