Karsan, HMC To Invest In LCV Production
News: Turkish automotive manufacturer Karsan and South Korea's Hyundai Motor Company (HMC) have signed a deal to manufacture light commercial vehicles (LCVs) at Karsan's facility in Turkey. Karsan will invest US$60mn in production, while HMC will spend US$200mn on developing the vehicles. The companies plan to begin production by end-2014 and intend to manufacture 200,000 vehicles in the first seven years. HMC will develop a small-sized bus, cargo van and truck that will be exported to Europe, North Africa, the Middle East and the Caucuses along with sale in the domestic market.
BMI View: BMI expects a diversification of export destinations, with producers in Turkey set to take more advantage of growth in nearby emerging markets. Turkey's importance as a regional centre for autos production has grown in recent years, with foreign players utilising the country's low-cost labour base, favourable exchange-rate and key geographic location for exports into the wider MENA region. International car manufacturers also view Turkey as a natural gateway into the large EU market.