Turkish Koç, Fiat announce $1 bln of investment in Turkey

Turkish Koç, Fiat announce $1 bln of investment in Turkey

Turkish Koç, Fiat announce $1 bln of investment in Turkey

Fiat 500 cars for sale are pictured at a car dealership. REUTERS Photo

Tofaş, the automaker owned by Turkey and Italy’s Fiat, said today it will invest $1 billion to produce three new models of cars, mainly for export. The Bursa, Turkey-based carmaker targets the production of 1.3 million hatchbacks, station wagons and sedans between 2016 and 2023, it said in a written statement to the Public Disclosure Platform (KAP).

The Turkey-based company had already announced last year that it would spend $520 million to build 580,000 units of a new sedan model.

 “We are excited to announce one of the biggest investments of Turkey with our partner FCA [Fiat Chrysler Automobiles]. Our investment for the production of two new models will show the success of Turkish engineers in a time when Koç Holding has been making the biggest organic investments of our history. The investments of Tofaş will reach up to $1.4 billion in the medium term with our three new models, as well as our new Doblo model in the pipeline,” Chairman of Koç Holding Mustafa V. Koç said.

These new investments will contribute to Turkey’s decreasing current account gap by heightening Tofaş’s export figures, he added.

Some 600 engineers work in the R&D center of Tofaş right now.

“Our center is the second biggest after the R&D center of Fiat-Chrysler in Italy. Tofaş has the know-how to develop products and technologies for our customers, both in Turkey and abroad,” said Tofaş CEO Kamil Başaran.

Başaran noted Tofaş aims to launch the new Doblo by the beginning of 2015 and the new sedan by the end of 2015.

“Our new hatchback and station wagon models will be online in 2016. We plan to produce 700,000 units between 2016 and 2023, most which will be for export markets,” Başaran said.

Automotive sales account for 14 percent of Turkey’s overall exports. The country exported 828,000 vehicles worth $21.5 billion last year, with European markets accounting for 70 percent of that total.

Tofaş posted a 22 percent rise in its third-quarter net profit to 127.1 million Turkish Liras ($56.66 million), the company said on Nov. 5.

It said sales in the third quarter were largely flat at 1.68 billion liras.