TURKEY: More automotive joint ventures move forward

26 July 1996

Plans for two more automotive joint ventures, both in the light-goods vehicle segment, are moving forward. South Korea's second largest automotive manufacturer, KIA Motors Corporation, plans a $50 million initial investnient with its partners, and Japan's Suzuki has started preliminary studies on a $100 million project.

KIA motors is planning a joint venture with the local Ihlas Holding to establish a plant at a site yet to be decided. Of the joint venture's $20 million capital, Ihlas will hold a 55 per cent stake, Japan's Nichiman 30 per cent, and KIA Motors 15 per cent, according to a letter sent by Ihlas to the Istanbul Stock Exchange.

The venture will make an initial investment of about $50 million, aiming to start production in April 1998. Initial annual output will be 10,000 of KIA Motors' Ceres pick-ups and 5,000 of its III-Besta, panelvan minibuses, but production will be expanded later to include 20,000 Sephia passenger cars. Initially, the local content of the vehicles will be 25 per cent, rising to 50 per cent in later years, according to the Ihlas letter. KIA motors will supply all technology and engineering services to the venture, which will employ about 450 people.

Suzuki is studying the establishment of an automotive manufacturing facility in Bursa, according to local press reports. The reports say the plant's initial capacity will be about 10,000 mainly small-scale commercial vehicles annually with subsequent gradual increases in capacity to include larger models. Construction is planned to start in 1997 with completion of the investment two years later.

A venture of Japan's Honda Motor Company and the local Anadolu Endustri recently announced a decision to proceed with plans for a major automotive manufacturing complex (MEED 12:7:96).

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