Autoliv to end car parts production in Turkey as part of global slowdown

By Marie Mannes and Can Sezer

STOCKHOLM/ISTANBUL, May 8 (Reuters) - Swedish car safety gear maker Autoliv ALV.N, ALIVsdb.ST will wind down its manufacturing operations in Turkey, pending a full closure in 2028, as it scales down capacity in response to a global industry slowdown.

The automotive sector has been under strain from slowing economic growth and higher costs, leading carmakers to reduce capacity and close factories. Autoliv customers such as Honda 7267.T, Volkswagen VOWG.DE and Nissan 7201.T are among those who have trimmed model line-ups and cut production.

Autoliv's production in Turkey employs 2,200 people, about 4% of its global workforce, in the manufacture of parts, including steering wheels, airbags and seatbelts. The production will be transferred to the company's other facilities in the Europe and Middle East region, the company said.

The complete closure of the Turkish manufacturing operations - which are in the industrial region Kocaeli, northwestern Turkey - is expected in the first half of 2028, the company added.

"The automotive industry is experiencing structural shifts and unprecedented transformation on a global scale," Autoliv said. "Management has determined that manufacturing capacity in the EMEA region exceeds future demand."

Instability from tariffs on the European Union and China, had made businesses view Turkey as an attractive low-cost manufacturing hub close to Europe and subject to the low 10% baseline tariff the United States applied under its reciprocal measures.

However, Turkey’s automotive sector, which hosts several of Autoliv's carmaking customers and produces about 1.4 million vehicles annually, mostly for export, has come under strain from rising labour costs and a relatively strong lira.

Autoliv said it will book a pretax charge of $142 million, consisting of a $129 million cash cost for decommissioning, severance payments and other restructuring, and a $13 million non-cash charge from fixed asset and inventory write-offs.