Volkswagen to Assemble Chinese Cars in Turkey Amid Sales Decline
Written with artificial intelligence.
Volkswagen has signed an agreement with Dogus Otomotiv to assemble vehicles manufactured in China at a new facility in Turkey. This move aims to address declining sales in China and reposition the company's production strategy closer to Europe.
Volkswagen's Strategic Shift
Volkswagen is adapting its production strategy by signing an agreement with Dogus Otomotiv, its long-time distributor in Turkey. This partnership will involve assembling cars made in China, thus moving away from the previous 'China for China' model to a new approach of 'China beyond China.'
Addressing Overcapacity
This new initiative aims to make use of excess manufacturing capacity in China by assembling completely knocked down (CKD) kits in Turkey. This shift is particularly important as Volkswagen grapples with a significant drop in sales, having recorded a 30% decline in the Chinese market in the first nine months of the year. By assembling models such as the FAW-Volkswagen Magotan and Sagitar in Turkey, the company hopes to mitigate overcapacity issues.
Market Potential in Turkey
The Turkish automotive market presents a lucrative opportunity, with around 630,000 vehicle registrations reported up to September 2026. Approximately 80% of these sales are for combustion engine vehicles, a stark contrast to the more electric vehicle-oriented European market. This aligns well with Volkswagen's current offerings, which still focus heavily on conventional combustion models.
Future Production Plans
Currently, Volkswagen does not operate any factories in Turkey, unlike competitors like Stellantis and Hyundai. However, the company previously considered establishing a large factory in Manisa before canceling those plans in 2020 due to the pandemic and economic challenges. The logistics of assembling vehicles in Turkey could significantly reduce production costs and make it easier for Volkswagen to introduce these models into the European market in the future.