German automaker Volkswagen announced this week that it will be halting its planned $1.4 billion investment in Turkey given the country's recent military offensive in Syria. The world's largest automotive manufacturer previously announced plans to establish a new facility in Turkey, which would be built in the country's western Manisa province.
In a statement released this week, the company revealed that the decision to halt its plans to build a facility in Turkey was made by Volkswagen AG's board of management. The firm is apparently still monitoring the situation in Turkey very carefully and the recent turn of events has raised some concerns over the firm's current developments in the region.
The carmaker announced its decision following Turkey's military action last week. Turkey launched a military offensive in Northern Syria and invaded territories controlled by the Iranian ethnic group known as the Kurds. The minority group is an ally of the United States and had played a major role in the country's fight against the Islamic State of Iraq and the Levant (ISIS).
Germany has publicly condemned Turkey's decision to invade the Syrian territory. German Chancellor Angela Merkel even called on Turkish President Recep Tayyip Erdogan to halt its military actions given the possible risk and the humanitarian consequences. According to reports from the United Nations, dozens of civilians have been killed and around 160,000 people have fled the area.
Apart from Germany, other European countries have also condemned Turkey's actions, vowing to halt all support if it does not put an end to its military action. The United States announced on Monday that it will be imposing new sanctions against Turkey, particularly on its ministers of defense, interior, and energy.
US President Donald Trump also announced that the country would be raising its tariffs on Turkish steel exports to as much as 50 percent. US critics have long blamed the Trump administration for paving the way for the invasion after it decided to pull out its troops from the region.
Turkey has so far rejected Europe and the US' call for an immediate ceasefire in northern Syria. Erdogan mentioned to reporters that the country was not worried about any sanctions and that it will not stop its operations.
Volkswagen Group operates around 122 production facilities located around the world. The company does have one factory in operation in Turkey, which produces vehicles for its heavy truck and diesel engine production subsidiary, MAN SE. The proposed $1.4 billion manufacturing plant in Turkey would have produced two vehicles for the domestic market, namely the Volkswagen Passat and the Skoda Superb.
