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Turkey announces new regulations on imported electric vehicles

2024-10-15 Update From: AutoBeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)09/21 Report--

The Turkish government issued a communique on September 20, announcing new regulations on imported electric and hybrid passenger cars, which will take effect within 30 days, Xinhua reported. According to the communique, the Turkish Ministry of Trade has further expanded the relevant restrictions on imported electric vehicles, including hybrid and rechargeable passenger vehicles. Under the new regulations, Turkish importers must set up at least 20 authorized service stations for after-sale assembly, maintenance and repair of imported vehicles in seven different regions of the country before they are allowed to import electric vehicles. Turkey has previously imposed high tariffs on imported electric cars.

Earlier, a presidential decision released by Turkey's Ministry of Trade showed that Turkey had decided to impose an additional tariff of 40 per cent on cars imported from China, that is, an additional tariff of at least $7000 per car from China, which will come into effect on July 7. Turkey's Ministry of Trade explained in an official statement that the 40% tariff will be aimed at traditional, electric and hybrid vehicles from China to protect the decline in domestic production share. the purpose of the tariff is to increase the market share of domestically produced vehicles and reduce the current account deficit.

Since the beginning of this year, the sales of Chinese car companies have begun to grow rapidly in the Turkish market. Data show that from January to August 2024, cumulative car sales in Turkey reached 762100, an increase of 0.9% over the same period last year, an all-time high.

Among them, the top three brands were Fiat, Renault and Ford, with sales of 93300, 82500 and 61100 respectively. Volkswagen ranked fourth with 57300, while Chery from China ranked fifth with 44700, up 114.4% from the same period last year. 6% of Turkey's total car market share. It is understood that the share of Chinese brands in the Turkish auto market will be 4.5% in 2023 and may reach 10% this year. Therefore, although the current market share of Chinese brands in Turkey is not high, the imposition of tariffs will have a profound impact on the future development and layout.

It is worth mentioning that after Turkey announced the imposition of tariffs on Chinese electric cars, BYD signed an agreement with the Turkish Ministry of Industry and Technology to invest in and build factories in Turkey. Under the agreement, BYD will invest about $1 billion to build a factory and research and development center with an annual production capacity of 150000 cars, which is scheduled to start production by the end of 2026 and will provide jobs for up to 5000 workers.

Turkey is not the only country that imposes tariffs on Chinese cars. On September 13, the Biden administration said it would sharply increase tariffs on a range of Chinese imports such as electric vehicles, chips and medical products from September 27, with the biggest increase being electric vehicles. The tariff rate on electric vehicles from China will be raised from 25% to 100%. If the 2.5% basic tariff imposed by the United States on electric vehicles is included, the final tax rate will reach 102.5%.

Earlier, the European Commission disclosed to interested parties a draft decision to impose a final countervailing duty on pure electric vehicles imported from China. Make a small adjustment to the proposed tax rate: BYD: 17.0%; Geely: 19.3%; SAIC: 36.3%; other cooperative companies: 21.3%; all other non-cooperative companies: 36.3%; decided to impose a separate tariff rate on Tesla as a Chinese exporter, which is set at 9% at this stage.

As more and more regions impose tariffs on Chinese electric vehicles, more and more of the manufacturer is planning to build factories overseas to reduce risk. However, at a recent meeting, the Ministry of Commerce cited a higher-level directive warning automakers not to invest in India and strongly advised against investing in factories in Russia and Turkey, according to media reports. and use a milder tone to highlight some of the risks of building factories in Europe and Thailand. At the meeting, the Ministry of Commerce encouraged automakers to use overseas factories for final vehicle assembly, that is, exporting bulk parts from China, to mitigate the potential risks posed by geographical problems, the report said. Outside India, Russia and Turkey, car companies can invest in car assembly plants, but do not build supply chains locally to ensure that core electric vehicle technology remains at home.

Chinese automakers are increasingly seeking overseas expansion, which is the key to Chinese cars' global expansion, but they also face higher development problems in their expansion. that is, a series of trade barriers have been put in place to avoid the loss of local brand market share. At present, the United States, the European Union, Turkey and Canada have all raised tariffs on the import of new energy vehicles from China. At present, the impact of imposing tariffs on local manufacturers is still controllable, but in the long run, this is obviously an insurmountable gap that needs to be resolved through continuous coordination by the Chinese side.

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