The Strategist

Volkswagen postpones decision to build factory in Turkey

10/15/2019 - 10:27

German carmaker Volkswagen AG has postponed the final decision on the construction of a plant in Turkey, according to Handelsblatt.

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“We are watching the situation with great concern,” the company told the publication.

Turkey has been criticized internationally for a military operation in northern Syria, and VW is concerned about potential reputation risks.

In early October, VW established a subsidiary with a capital of 943 million liras ($ 164 million) in the Turkish province of Manisa. The company is planning to build an enterprise that will produce about 300 thousand cars a year. Investments in the project were estimated at €1.3 billion.

On October 9, the Turkish armed forces launched Operation Peace Spring in the northeast of Syria to oust Kurdish militants from border areas. The operation involves the Turkish armed forces, as well as the Syrian National Army group supported by Ankara. The main objective is to create in Syria a militant-free zone with a length of 480 km and a depth of 32 km from the Euphrates River to the Iraqi border. Turkey considers the Kurdish People’s Self-Defense Forces to be terrorists because of their ties to the Kurdistan Workers Party, which Ankara has included on the list of terrorist organizations.

The US and European countries opposed this operation. US authorities have already imposed restrictive measures against Turkish ministries of defense and energy.