Coronavirus cancels plan for new Volkswagen plant in Turkey

German automaker Volkswagen is dropping its plans for a new factory in Turkey in response to a drop in demand for new cars during the coronavirus pandemic

BERLIN -- German automaker Volkswagen said Wednesday it is halting plans for a new factory in Turkey, saying that the steep drop in demand for cars worldwide caused by the coronavirus pandemic means the manufacturing capacity is no longer needed.

The 1.3 billion euro ($1.4 billion) plant in Manisa on Turkey's western coast was to make the Volkswagen brand Passat and the Superb, a sedan from its Skoda brand, starting in 2022 with an annual capacity of 300,000 units.

The plans had met with opposition from German labor unions and Volkswagen then faced more criticism after Turkey invaded Syria. The project had been on hold since last year.

The company said that the pandemic had pushed market growth expectations far into the future and that “the construction of additional capacities is therefore from today's viewpoint not needed.”

The plant was originally intended to supply vehicles that would satisfy what was previously envisaged as growing demand in Eastern Europe and the Middle East. The company said it would carry out all its planned vehicle projects with its current factories.