Autoliv to end car parts production in Turkey as part of global slowdown
Autoliv's Strategic Shift and Impact on Turkish Operations
By Marie Mannes and Can Sezer
Autoliv's Decision to Wind Down Turkish Manufacturing
STOCKHOLM/ISTANBUL, May 8 (Reuters) - Swedish car safety gear maker Autoliv will wind down its manufacturing operations in Turkey, pending a full closure in 2028, as it scales down capacity in response to a global industry slowdown.
Global Automotive Sector Challenges
The automotive sector has been under strain from slowing economic growth and higher costs, leading carmakers to reduce capacity and close factories. Autoliv customers such as Honda, Volkswagen and Nissan are among those who have trimmed model line-ups and cut production.
Details of Turkish Operations
Autoliv's production in Turkey employs 2,200 people, about 4% of its global workforce, in the manufacture of parts, including steering wheels, airbags and seatbelts. The production will be transferred to the company's other facilities in the Europe and Middle East region, the company said.
Timeline for Closure
The complete closure of the Turkish manufacturing operations - which are in the industrial region Kocaeli, northwestern Turkey - is expected in the first half of 2028, the company added.
Industry and Economic Factors Influencing the Decision
Structural Shifts in the Automotive Industry
"The automotive industry is experiencing structural shifts and unprecedented transformation on a global scale," Autoliv said. "Management has determined that manufacturing capacity in the EMEA region exceeds future demand."
Turkey's Position in the Global Automotive Market
Instability from tariffs on the European Union and China, had made businesses view Turkey as an attractive low-cost manufacturing hub close to Europe and subject to the low 10% baseline tariff the United States applied under its reciprocal measures.
Challenges Facing Turkey's Automotive Sector
However, Turkey’s automotive sector, which hosts several of Autoliv's carmaking customers and produces about 1.4 million vehicles annually, mostly for export, has come under strain from rising labour costs and a relatively strong lira.
Financial Implications for Autoliv
Autoliv said it will book a pretax charge of $142 million, consisting of a $129 million cash cost for decommissioning, severance payments and other restructuring, and a $13 million non-cash charge from fixed asset and inventory write-offs.
(Reporting by Marie Mannes in Stockholm, Can Sezer in Istanbul and Shivani Tanna in Bengaluru; Writing by Louise Rasmussen in Copenhagen; Editing by Sonia Cheema, Terje Solsvik and Barbara Lewis)
