German car manufacturer Volkswagen has delayed plans to open a 1.3 billion euro ($1.4 billion) plant in Turkey as a result of the country’s military offensive on Kurdish-led fighters in northeast Syria.
“The decision for the new factory has been postponed by the board of Management of the Volkswagen AG,” a spokesperson told Al Arabiya English in an emailed statement on Wednesday.
“We are monitoring the current situation with great concern,” the spokesperson added.
Volkswagen was set to produce the Passat and Skoda Superb at the new plant, aiming for 300,000 units per year and a workforce of roughly 4,000, according to German state-owned broadcaster Deutsche Welle.
Volkswagen Group currently has one factory in Turkey, which produces commercial vehicles for its MAN subsidiary. The carmaker has 122 production plants across 20 European countries and 11 countries globally.
Volkswagen’s decision to delay building the plant comes after the United States announced its plans to impose economic sanctions on Turkey – one of its key NATO allies.
“I will soon be issuing an Executive Order authorizing the imposition of sanctions against current and former officials of the Government of Turkey and any persons contributing to Turkey’s destabilizing actions in northeast Syria,” US President Donald Trump said in a statement on Tuesday.
This decision also means “immediately” stopping discussions being held by the US Department of Commerce in regards to a $100 billion trade agreement with Turkey, President Trump added.
“The United States will aggressively use economic sanctions to target those who enable, facilitate, and finance these heinous acts in Syria,” he added. “I am fully prepared to swiftly destroy Turkey’s economy if Turkish leaders continue down this dangerous and destructive path.”