VW Awards Turkey New Multi-Brand Factory After Strong Lobbying From Shareholder Qatar

The Volkswagen Group has been trying for months to reach a decision regarding the location of its new multi-brand plant planned for Europe.

From the beginning, the automotive giant said the location of the plant would be somewhere in southeastern Europe, and most recently Turkey and Bulgaria were shortlisted as favorites. In the end, it appears that Turkey got the upper hand on its northwestern neighbor.

According to a report from Germany’s Automobilwoche cited by sister publication Autonews Europe, VW’s supervisory board met on Thursday and picked Turkey’s city of Izmir as the site for the new plant over a location in Bulgaria.

The decision may come as a surprise to some people, given that Bulgaria is a member of the European Union while Turkey is not. In an interesting turn of events, the State of Qatar had a decisive influence on the matter. How, you ask? Well, let us remind you that the Middle Eastern nation is a major VW Group shareholder, owning 14.6 percent of the company and 17.0 percent of voting rights through its Qatar Holding company.

Apparently, Qatar representatives pushed for the factory to be built in Turkey during the board meeting, convincing VW CEO Herbert Diess, among other members. The big question here is why did Qatar tip the balance in Turkey’s favor and the answer is not easy to find as economic interests are probably mixed with geopolitics in this case.

Turkey is a staunch ally of Qatar and was even invited to build a military base in the Persian Gulf country – which it did. Turkey’s economy is not doing great lately and a significant foreign investment such as a brand new VW Group plant is obviously welcome.

Also read: Clash Between US And Turkey Issues Warning Shots For Turkish Auto Factories

The new factory in Izmir will build cars for the Volkswagen, Skoda, and Seat brands, helping ease overcapacity at Skoda factories in the Czech Republic. According to previous reports, production will include the Skoda Karoq and Seat Ateca compact SUVs, in an annual capacity of up to 350,000 units.

Note: Skoda Karoq production in the Czech Republic pictured