AutoBeta(AutoBeta.net)08/07 Report--

On July 8, local time, in the presence of Turkish President Recep Tayyip Erdogan, BYD signed an agreement with the Turkish Ministry of Industry and Technology to invest and build a factory in Turkey. Under the agreement, BYD will invest about $1 billion to build a factory and research and development center with an annual production capacity of 150000 cars, which is scheduled to start production by the end of 2026 and will provide jobs for up to 5000 workers.

The reason why we chose to build a factory in Turkey may be related to the imposition of tariffs.

In June, a presidential decision released by Turkey's Ministry of Trade showed that Turkey imposed an additional 40 per cent tariff on cars imported from China from July 7, that is, an additional tariff of at least $7000 per car from China. Turkey's Ministry of Trade explained in an official statement that the 40% tariff will be aimed at traditional, electric and hybrid vehicles from China to protect the decline in domestic production share. the purpose of the tariff is to increase the market share of domestically produced vehicles and reduce the current account deficit. It is worth mentioning that on July 5, the Turkish government announced that automakers investing in factories in Turkey would enjoy investment incentives and would only have to pay a 10% tariff.

In addition, the European Commission (hereinafter referred to as "the European Commission") officially issued a notice on July 4, deciding to impose a temporary countervailing duty on electric vehicles imported from China from July 5 for a maximum period of four months. During this period, BYD will be subject to a temporary countervailing duty of 17.4%. EU member states will vote on the final countervailing measures, and if approved, the EU will formally impose a five-year countervailing duty on Chinese electric vehicles.

Industry insiders said that the construction of the plant will also be conducive to the development of BYD in the Turkish market, while Turkey is geographically located, and the Turkish factory is expected to facilitate the supply of BYD to the European Union.

Since the beginning of this year, the sales of Chinese car companies have begun to grow rapidly in the Turkish market. Data show that cumulative car sales in Turkey from January to May in 2024 were 471700, up 6 per cent from a year earlier. Among them, the top three brands were Fiat, Renault and Ford, with sales of 58200, 53700 and 37300 respectively. Volkswagen ranked fourth with 35200, while Chery from China ranked fifth with 27000, up 387.3% year-on-year and accounting for 5% of Turkey's total auto market. In addition, there are 9478 Mingjue and 1065 BYD. It is understood that the share of Chinese brands in the Turkish auto market will be 4.5% in 2023 and may reach 10% this year. Therefore, although the current market share of Chinese brands in Turkey is not high, the imposition of tariffs will have a profound impact on the future development and layout.

In addition to the Turkish factory, 2024 has become the peak year for BYD to put into overseas production. Last week, BYD's Thailand plant (150000 vehicles / year) was officially completed, which took only 16 months from the start of construction to production, including the four major vehicle processes and parts factories. In addition, the Brazilian factory (150000 vehicles / year) is scheduled to start production in the second half of this year, while Indonesia (150000 vehicles / year) and Hungary (200000 vehicles / year) have signed an agreement and construction will start during the year. A feasibility study on the Mexican plant (150000 vehicles per year) has been launched and site selection negotiations are under way. On July 9th Peruvian Foreign Minister Javier Gonzalez-Olaechea announced that BYD was evaluating the possibility of building a car assembly plant in Peru. To sum up, up to now, BYD's total overseas production capacity has reached 1.25 million vehicles / year, and the radiation area has covered South America, Southeast Asia, Central and Eastern Europe and so on.

In the first half of this year, BYD sold 1.607 million new energy passenger vehicles, up 28.8% from the same period last year, of which 341700 were sold in June, up 35.02% from the same period last year. With the gradual landing of the global layout of passenger car production base, BYD's production growth is expected to further accelerate. According to official planning, the sales target for 2024 is between 4.5 million and 5 million.

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