TURKEY: Korea's KIA applies for auto plant

11 October 1996

South Korea's KIA Motors Corporation has applied to the treasury's Foreign Investment Directorate to invest a total of $245 million in a factory which will make pick-up trucks, minibuses and cars. KIA, Japan's Nichimen Company and Turkey's Ihlas Holding are setting up the plant as a joint venture which was announced in July.

MA will own 15 per cent of the project and supply all the technology and the engineering, while Nichimen will own 30 per cent and Ihlas 55 per cent (MEED 26:7:96).

The plant is intended to start production in April 1988. It will have an initial yearly output of 10,000 Cers pick-ups and 5,000 III Besta panel-vans and minibuses. In the future it will also produce 20,000 Sephia cars annually. Local content will start at 25 per cent, rising to 50 per cent in following years.

The project will employ 450 workers.

KIA joins a number of other Far Eastern manufacturers who have been setting up manufacturing bases in Turkey in the second half of the 1990s. Turkey provides an attractive proposition for car manufacturers because of its expanding domestic market and the advantage of a customs union it signed with Europe in January of this year.

The Far Eastern companies include South Korea's Hyundai Motor Corporation, and Japan's Honda Motor Company, Mazda and Suzuki. They are following the lead of Toyotasa, a joint venture which started commercial manufacture of the Toyota Motor Company's Corolla range in October 1994 with the aim of producing about 100,000 units by 2000.

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