Hurriyet - South Korean company Hyundai Assan will be the first company to benefit from the Turkish government’s newly commissioned investment incentives system. Having decided to increase the production capacity of its Izmit plant from the current level of 100,000 units to 200,000 units by the end of 2013 with a total investment of TRY 1 billion, Hyundai Assan will take advantage of the new incentives system by completing 20 percent of the investment plan by August. By means of the TRY 200 million investment, Hyundai Assan will be exempt from the 10 percent customs duty of vehicles to be exported after August, thus enjoying a tax advantage worth TRY 40 million per annum.
Umit Karaarslan, General Manager of Hyundai Assan, stated that they have already pushed the button to benefit from the new incentives and added, “According to the new incentives system, you can take advantage of the new incentives if you complete 20 percent of the investment plan. In this regard, we will make 20 percent of our TRY 1.1 billion worth of the new investment announced in August.”
According to the new incentives system, automotive investments with a yearly production capacity of at least 100,000 units or those that increase their existing capacity in Turkey by at least 100,000 units per annum will enjoy the advantage to import A, B and C segment-vehicles duty free in the amount of 15 percent of their capacity increase. While this incentive is of great significance for Japanese and Korean brands that pay a 10 percent customs duty on imports, it does not mean a lot for producers that import duty-free vehicles from Europe.
Umit Karaarslan said they will have a tax advantage of around USD 22.5 million (TRY 40 million) on a yearly basis, if they are excluded from customs duty for the imports of 15,000 vehicles and said, “As most of our vehicles come from Europe, we do not pay customs duty. This incentive will have the most effect on the Accent Blue that is imported from Korea. We will no longer pay additional customs duties for this model.”