Turkey Presents Prototypes in $3.7 Billion Car Project
(Bloomberg) -- Turkey unveiled prototypes for its “domestic car” project on Friday, as the government announced sweeping incentives to back President Recep Tayyip Erdogan’s ambition to create a Turkish-made vehicle.
Turkey’s Automobile Joint Venture Group Inc., or TOGG, which comprises five companies and a business umbrella organization, will establish a factory in the manufacturing hub of Bursa, according to a presidential decree in the official gazette. The 22 billion liras ($3.7 billion) investment will enable the production of five models and a total output of 175,000 vehicles a year.
The first, a C-SUV, will be introduced in 2022, according to TOGG’s website. The group has been dropping hints about what it will look like on its Twitter page for days. The car was designed by Italy’s Pininfarina SpA, Dunya newspaper reported on Dec. 11.
The project is expected to contribute $50 billion to the Turkish economy in the 15 years following 2022, according to Mehmet Gurcan Karakas, the chief executive officer of the consortium.
The investment will enjoy comprehensive tax cuts, free land allocation, interest rate reductions and a government purchase guarantee of 30,000 vehicles until the end of 2035, according to the decree. Investors are obliged to provide at least 3.5 billion liras in cash as capital by the end of 2023.
Erdogan, who drove the prototype SUV after a ceremony on Friday to unveil the designs, said the car represents the culmination of Turkey’s progress in industrial technology.
Erdogan first urged Turkish companies to join forces to manufacture a domestic vehicle nine years ago, saying in Jan. 2011 that he was “looking for a brave fellow, an investor for a domestic car.” More than six years after that call, a consortium, which includes Anadolu Group, BMC, Kok Group, Turkcell and Zorlu Holding, was established. Turkey is already a major auto-parts maker.
Turkey was the ninth-biggest car market in Europe as of November, according to data from the Automotive Distributors’ Association. A total of 316,427 cars were sold in the country in the first 11 months of 2019, down 26% from the same period a year earlier.
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