Posted on 08 Jul 2024
Turkey is set to announce a $1 billion deal with Chinese electric vehicle (EV) maker BYD for a new plant in Manisa province on Monday, according to Bloomberg.
The plant will facilitate BYD's access to the EU, with which Turkey has a customs union agreement, particularly as the EU recently increased tariffs on Chinese EV imports.
The Turkish domestic market, where EVs made up 7.5% of car sales last year, also stands to see consumers benefit.
BYD is expanding its global presence, with new plants in Thailand, Brazil, and potential sites in Mexico, in addition to its limited European operations. This expansion aims to bring BYD closer to major markets and mitigate tariff risks, according to the same report.
Turkish steel suppliers like Erdemir, Habas, Borcelik, Colakoglu and Tat Metal may be interested in supplying steel to the new project, a market participant tells Kallanish.
Some suppliers will however be reluctant due to concerns about automotive-grade raw materials for DX54 or DX56 hot-dip galvanized coils. One producer meanwhile exclusively sells commercial-grade products, he adds.
“If it [the BYD plant] happens, there are two mills that could benefit if automotive production increases: Borcelik and Erdemir,” another industry participant notes.
In June, Turkey imposed an additional customs tax of 40% of the import value or $7,000 per unit, whichever is higher on cars imported from China. The move aims to protect domestic automakers and incentivise Chinese manufacturers to establish production facilities within Turkey.
On Friday, Turkey eased recently imposed tariffs on imports of Chinese motor vehicles to encourage investment. In accordance with the presidential decision, auto imports of Chinese origin, which are carried out within the scope of the investment incentive certificate, will be exempt from this additional financial liability.
The country already introduced a tariff on Chinese electric vehicles last year.
On Thursday, the EU imposed provisional countervailing duties on China-made battery electric vehicles, with individual tariffs based on carmakers’ circumstances. The European Commission reduced some tariffs after considering comments from interested parties, resulting in duties ranging from 17.4% for BYD to 37.6% for non-cooperating firms. Bilateral consultations between the Commission and China are ongoing, aiming for a WTO-compatible solution within the four-month provisional period.
BYD did not respond to requests for comment before the deadline on Friday.
Source:Kallanish
