HAMBURG -- Volkswagen has decided against building a new multibrand plant in Turkey because collapsing car sales amid the coronavirus has left existing plants struggling to operate at full capacity.
VW had picked Manisa, 40 km (25 miles) northeast of Izmir on Turkey's western coast, for the plant.
It was scheduled to build the next-generation Passat its sister model, the Skoda Superb, starting in 2022, with a maximum annual production capacity of 300,000 vehicles.
The Turkish factory, which would be VW Group's 133rd worldwide, would only add to the automaker's excess capacity, sources told Automobilwoche, a sister publication of Automotive News Europe.
VW will now build the next generations of the the Passat and Superb at its plant in Bratislava, Slovakia, the sources said.
The VW Passat is currently built for European markets in Emden, Germany. VW plans to replace Passat prodcution in Emden with a new electric vehicle from its ID family of battery-powered cars. The Superb is produced in Skoda's factory in Kvasiny in the Czech Republic.
In October last year, VW put the Turkish plant on hold amid international criticism of the country's military operations in Syria.
VW said the decision to halt the factory was taken because the coronavirus has led to a collapse in demand.
The automaker started planning the factory when overall economic conditions, particularly in Eastern Europe and the Middle East, were positive. That is not the case now, the company said in a statement emailed to Automotive News Europe.
Christiaan Hetzner contributed to this report