A contract valued at about $20 million is to be awarded soon for the construction of a factory near Istanbul to build cars made by Japan's Honda Motor Company. The client is a 50:50 venture between Honda and the local Anadolu Endustri Holding.

Six companies have returned tenders for the work. They are Japan's Hazama, the UK's John Laing International, and locals Sezai Turkes-Feyzi Akkaya (ST-FA), Enka, Ozer and Baytur. The Honda joint venture may also complete the purchase soon of a site for the plant, which will probably be in Gebze to the east of Istanbul.

The total project is valued at about $300 million. If all goes according to plan, the plant will start production in early 1997, making either the latest model of the Honda Civic, or a Civic-based car. Initial output will be between 15,000-30,000 vehicles annually, rising to 100,000 vehicles annually over a five-seven year period.

Honda's project was approved by the government along with one planned by South Korea's Hyundai Motor Company in late 1993 (MEED 7:1:1994). Another Japanese joint venture, Toyotasa, started making Toyota Corolla cars in mid-October at a complex near Adapazari. Both new foreign entrants and established local manufacturers started to invest in new capacity in the automotive sector in the early 1990s, based on demand forecasts of up to 1 million sales annually by 2000 compared with around 340,000 in 1993. However, output fell by 37 per cent in January-September compared with the first nine months of 1993 because of the economic crisis.