• Volkswagen and Turkish distributor Doğuş Otomotiv have signed a letter of intent to explore producing Volkswagen-brand passenger cars in Türkiye, announced via Türkiye’s capital market platform KAP on October 30.
• No vehicle models, investment figures, production capacities or timeline have been confirmed; Doğuş Otomotiv shares rose 10% on the news, on track for their biggest one-day gain since May 2025.

Volkswagen and Doğuş Otomotiv have signed a letter of intent to explore producing Volkswagen-brand passenger cars in Türkiye, reviving the prospect of local Volkswagen manufacturing six years after the German group abandoned plans for a major factory in the country.

The agreement was disclosed on October 30 through Türkiye’s KAP capital markets platform. Doğuş Otomotiv has distributed Volkswagen vehicles in Türkiye for more than 30 years and has expanded its relationship with the German manufacturer into Iraq, Azerbaijan and Syria. Neither company has disclosed which models could be built, how much would be invested, expected production volumes or when assembly could begin. Doğuş Otomotiv shares jumped around 10% following the announcement, putting the stock on course for its strongest one-day rise since May 2025.

CKD Assembly and China-Developed Models

According to Germany’s Auto Motor und Sport, one option under consideration is CKD — Completely Knocked Down — production. Under that approach, vehicle kits produced at existing Volkswagen factories would be shipped to Türkiye and assembled locally, rather than requiring a conventional full-scale manufacturing plant. Models reportedly being examined include vehicles developed through FAW-Volkswagen in China, including the Magotan — the Chinese-market Passat — as well as models from the Jetta and Audi brands. Volkswagen confirmed to Turkish media it is examining whether partly assembled vehicles could be exported from non-European production sites for final assembly in Türkiye. No decision has been made on whether battery-electric models would be included.

Volkswagen’s Wider China Strategy

The Türkiye discussions fit Volkswagen’s broader push to use products, engineering and manufacturing developed in China in markets outside the country. The group already exports China-made vehicles to the Middle East, Uzbekistan, Kazakhstan and parts of Sub-Saharan Africa, with Mexico, Egypt and Vietnam expected to be added by the end of 2026. Its China Main Platform and China Electronic Architecture are planned as the technical base for local model ranges in South America from 2030. Türkiye sits between Europe, the Middle East and Central Asia, making it potentially attractive as both a domestic vehicle market and a lower-cost regional assembly base.

Cost Pressure

The talks come as Volkswagen is imposing tighter investment discipline across its core brands. Brand Group Core net cash flow fell to €1.43 billion [$1.56 billion USD] in the first nine months of 2026, down from €4.34 billion [$4.74 billion USD] in the same period of 2025. Volkswagen has temporarily paused development of the electric ID.Golf as part of a broader effort to control spending. Whether the possible Turkish assembly operation is connected with those measures has not been confirmed, although CKD production would require substantially less capital than a new integrated factory.

Previous Turkey Plans

Volkswagen came close to establishing a large Turkish manufacturing operation in 2019, when it planned a factory in Manisa intended to build models including the Passat and Škoda Superb. The project envisaged investment of around €1.3 billion [$1.42 billion USD] and annual production capacity of up to 300,000 vehicles. Volkswagen abandoned it in 2020, citing the COVID-19 pandemic and changed global economic conditions.

The latest letter of intent represents an opening rather than a confirmed return to Turkish manufacturing. For now, the two sides are studying the economics, vehicle programme and production structure before any decision is made.

Ata Yatırım analyst Cemal Demirtas said “a serious passenger car production partnership could have a significant long-term impact on Doğuş.

Source:   FCW Team