COLOGNE, Germany 

German automotive giant Volkswagen’s major investment in Turkey would encourage other big foreign companies to invest in the country, Istanbul Chamber of Commerce (ITO) President Sekib Avdagic said on Sunday.

Volkswagen has established a subsidiary in Turkey last week, with plans to build a multi-brand production plant in the western Manisa province.

“Volkswagen’s investment in Turkey is itself a very significant development. This would boost further foreign investments in the country,” Avdagic told Anadolu Agency in an exclusive interview.

“Turkey has become a production hub of global firms for international markets thanks to its skilled labor force and a dynamic investment environment,” he said.

Volkswagen Turkey Otomotiv Sanayi ve Ticaret A.S. was established last week with capital of 943.5 million Turkish liras ($164.5 million), according to the Turkish Trade Registry Gazette.

The company was founded to design, produce, assemble, sell, import and export automobiles, trucks and all sorts of motor and transport vehicles and their parts and components.

The German carmaker is expected to invest more than € 1 billion for the factory and start production in 2022.

The Volkswagen Group, established in 1937, is the owner of several vehicle brands, including Audi, Seat, Skoda, Lamborghini, Porsche, Bentley, Man, Ducati, and Scania.

Other prominent auto manufacturers -- including Fiat, Ford, Hyundai, Mercedes, Renault, and Toyota -- have manufacturing operations in Turkey.

* Writing by Ayhan Simsek