Volkswagen has signed a letter of intent with its long-term partner Dogus Otomotiv to explore vehicle production in Turkey. The agreement, announced on October 30 via the KAP capital market platform, aims to support the local automotive industry and introduce advanced technology products to the Turkish market.
The companies are considering the assembly of vehicles using the Completely Knocked Down method. This approach involves importing kits from existing production sites, potentially including those from the FAW-Volkswagen joint venture in China, such as the Magotan, Jetta, and Audi models.
This initiative aligns with Volkswagen's broader strategy to utilize China as a development and export hub for international markets. The group already exports Chinese-made vehicles to regions including the Middle East, Uzbekistan, and Kazakhstan, with plans to expand to Mexico, Egypt, and Vietnam by the end of 2026.
Volkswagen is currently under significant financial pressure, with the net cash flow of its Brand Group Core dropping from €4.34 billion to €1.43 billion in the first nine months of 2026. Consequently, the company has suspended development of the electric ID.Golf to improve investment discipline.
This is not the first time Volkswagen has considered manufacturing in Turkey. In 2019, the group planned a €1.3 billion investment in a plant in Manisa with a capacity of 300,000 vehicles, but the project was abandoned in 2020 due to the pandemic and shifting economic conditions.
No final decision has been reached regarding the new production plans. It remains unclear whether the potential assembly will focus solely on the Turkish market or include electric vehicles, and whether these efforts are linked to the company's current cost-saving measures.
