Ford gets ready to build VW Transporter van in Turkey, helped by $2.6B investment

Ford's 20.5 billion Turkish lira ($2.6 billion) investment to increase capacity at its Transit van factory in Turkey will enable the plant to build the Volkswagen Transporter midsize van at the plant, a source familiar with the matter said.

Ford's joint venture company in Turkey, Ford Otosan, said last week that it will invest in its Kocaeli plant near Izmit, to increase the plant's annual capacity to 650,000 units from 440,000 by the middle of 2026.

The money will be used for "long-term new-generation commercial vehicle projects," Ford Otosan said in a filing to the Turkish stock exchange.

Ford and VW announced an industrial alliance in 2019 for the joint engineering and production of vans, as well as other projects such as autonomous cars and an electric car for Ford on VW's MEB platform.

The companies said Ford would engineer and build a new VW Transporter van alongside its next Transit Custom van, with production starting in 2022. They also said VW would build a compact van for Ford alongside its VW Caddy in Poznan, Poland.

VW began sales of its fifth-generation Caddy last month and the Ford version to replace the Tourneo/Transit Connect is due next year.

Ford and VW have not said where the Ford-based VW Transporter will be built but the source said that it will be at Ford's Kocaeli plant.

Ford did not confirm that the Turkish investment was to incorporate the Transporter. "This latest investment supports Ford's leadership position and increasing growth in the European commercial vehicle market," the company said in an emailed statement to Automotive News Europe.

VW currently builds T6 passenger and commercial versions of the Transporter at its factory in Hanover, Germany.  When the Ford-VW alliance was announced in 2019, labor leaders at the factory demanded assurances from VW that the factory's future would be secured.

Last month, VW said it will invest in Hanover to build the ID Buzz, a modern, full-electric version of VW's Microbus that became a 1960s icon, along with three full-electric midsize SUV models for other VW Group brands.

VW did not specify which models these will be. Handelsblatt newspaper reported that they will be flagship electric cars for Audi, Porsche, Bentley developed under the codename "Landjet."

Reports in the German press say that the next-generation VW Transporter, called T7 for the seventh generation, will use VW Group's MQB platform for passenger cars. The platform is not suitable for heavy loads so the current T6 will continue to be sold alongside the T7 for commercial users until Ford's new version of the Transit is available to VW in 2024.

Commercial versions of the T6 will be transferred to Ford Otosan, Handelsblatt has reported.

VW will launch the T7 next year and will only build 25,000 units over its five-year lifecycle because it plans to focus on the ID Buzz, auto-motor-sport reported in October.

Ford's partnership with VW also calls for Ford to engineer and build a new pickup for Europe and other markets due in 2022 that will replace both the current Ranger and the VW Amarok.

The two companies said earlier this year that they could produce 8 million commercial vehicles over the lifetime of the collaboration.

The partnership will also see Ford using VW's MEB electric platform to build a mass-market battery-powered car positioned below Ford's forthcoming Mach E SUV. The Ford MEB car will be built in its plant in Cologne and will go on sale in 2023, according to German media reports.

The investment in Turkey includes money to build a battery assembly facility that will produce packs for an electric version of the Transit that will go on sale in 2022.

The investment represents one of the biggest recent announcements of a cash injection into the Turkish automotive industry, which was dealt a blow earlier this year when VW announced it was no longer pursuing a plan to build a new plant there after reassessing its capacity needs.