Turkey is about to announce a $1 billion electric car factory with BYD

Ankara - Turkey will soon announce a deal with Chinese electric car maker BYD to build a new US $1 billion (S $1.352 billion) factory in western Turkey, officials said.

Turkish President Recep Tayyip Erdogan is expected to announce the deal at a ceremony in Manisa province next Monday, said the officials, who spoke on condition of anonymity because they were not authorized to comment publicly. Byd and the Turkish presidency declined to comment.

Bloomberg reported that due to Turkey's customs union agreement with the European Union, the new plant could give BYD easier access to the EU market. This week, the European Union raised import duties on Chinese electric vehicles to as much as 48 percent.

In addition, the new plant will serve Turkey's home market, where electric vehicles accounted for 7.5 percent of total vehicle sales last year in a country of nearly 90 million people.

Turkey on Friday eased import duties recently imposed on Chinese cars to encourage investment.

Chinese electric car giant BYD opened Southeast Asia's first electric car production line in Thailand on Thursday. Byd has also built a factory in Brazil and is considering Mexico, but it has little presence in Europe.

The opening of the new plant highlights not only BYD's efforts, but also its determination to be close to the big market and to deal with the threat of tariffs.