Turkish company inks deal with Tesla to produce metal parts

Turkey’s Küçükoğlu Holding, which produces parts for global automotive brands including Toyota, Volkswagen and Mercedes, signed a supplier agreement with Elon Musk-owned electric car giant Tesla to supply for its new model.

Küçükoğlu Holding Chairperson Oğuzhan Küçükoğlu confirmed the deal to Turkish economics daily Dünya saying that the Tesla is establishing its first factory in Europe in Germany and the Model Y vehicles will be produced at this factory.

“We will manufacture the metal parts of these vehicles. We got the tender for the sheet metal parts that we call the body parts,” he said.

The Turkish company will carry out production for the U.S. electric car giant at the holding brand Toksan factory in the Gebze district of northwestern industrial province of Kocaeli.

Stating that they were inspected for six months regarding this tender, Küçükoğlu said: “We started an investment of around 2 million euros ($2.38 million) in the factory. We will employ an additional 50 people for Tesla production alone."

However, he said, the most significant aspect of the deal is that the company will provide foreign currency inflow to Turkey while exporting all production.

The agreement value made by the holding is 8 million euros per year. The total value of the 5-year contract is 40 million euros. The investment will be completed within this year and the first products will be sent to Germany at the end of this year.

Küçükoğlu Holding, which currently has 1,600 employees, operates in the automotive, construction and retail sectors. The holding, which started its operations in the automotive sector in 1985, has production facilities in Istanbul, northwestern Bursa, Kocaeli and Adapazarı provinces and in Slovenia.

In addition, Küçükoğlu's subsidiary Akteknik, which has a production area of 110,000 square meters, will also make the molds of Tesla parts to be produced by the holding.

Küçükoğlu stressed that this cooperation started with Germany but may extend into the U.S.

"Once you become the supplier of Tesla, it opens doors towards the U.S.," he said adding that the focus of businesses is in the factory in the U.S. and they "started negotiations for this place as well. We are on the way to becoming a main supplier for Tesla."