Sentury Bets 1.8 Billion RMB on Turkey, Chinese Tires Break EU Tariff Wall

On October 8, Qingdao Sentury Tire Co., Ltd. (002984.SZ) issued an announcement to partner with top Turkish tire distribution enterprise TATKO Group, investing $272.82 million (equivalent to 1.824 billion RMB) to build a high-performance passenger and light truck radial tire project with an annual output of 7 million tires. This is Sentury's third overseas intelligent manufacturing base after Thailand and Morocco, and the first Chinese tire enterprise to officially launch operations in Turkey, adding a critical move to its "833Plus" global strategy.

Stable Accounts, Promising Returns

The project is held 90.1% by Sentury and its wholly-owned subsidiary (approx. $246 million), with TATKO holding 9.9% (approx. $27.01 million). Funded entirely by internal resources, the low debt structure ensures controllable financial risk. Construction period is 18 months. After reaching full capacity, normal operations are expected to generate annual revenue of $204.62 million, net profit of $42.11 million, with a net profit margin reaching 20.58%. The break-even point is only 39.75% — operating at 40% capacity is enough to break even. Combined with Turkey's 2025 new investment incentive policy (equipment imports qualify for duty and VAT exemptions, 60% income tax reduction), actual returns still have room for upward revision.

Especially notable are the efficiency indicators: For a factory producing 7 million tires annually, total workforce is only about 400 people, meaning 17,500 tires per person annually. Intelligent central control, production execution, warehousing logistics, inspection scanning, and dispatch warning systems run through the entire process — this intelligent manufacturing template, validated twice in Thailand and Morocco, will be fully transferred to Turkey this time.

A "Zero-Tariff Ticket" to Enter the EU

The consideration of selecting Turkey strikes at industry pain points. In July this year, the EU's anti-dumping final ruling on Chinese passenger and light truck tires took effect, with tax rates ranging from 4.3% to 45.3%, Sentury subject to a 24.4% rate. Chinese tire exports to Europe saw a significant decline. However, according to the EU-Turkey Industrial Goods Customs Union, industrial manufactured goods taxed in Turkey can be exempt from tariffs and enter the EU directly with an A.TR certificate. Interestingly, the surrogate country used for EU anti-dumping calculations is exactly Turkey — producing in Turkey equals exchanging domestic manufacturing status for EU market access.

At the same time, Turkey is a major European complete vehicle base: 2025 car production is about 1.42 million units, export rate about 74.5%, with automakers such as Ford, Toyota, Hyundai, Renault gathered. Chery and BYD have also announced building factories. There are about 1,100 parts supporting enterprises. The new factory can achieve a closed loop for both original equipment and replacement tire markets.

9.9% Equity, Nationwide Shelves Secured

Partner TATKO was founded in 1927, is one of Turkey's largest independent multi-brand tire distributors, network covers 81 provinces nationwide, 850 sales points, and holds cross-border export channels facing the Balkans and Central Asia. Products can reach target markets directly via its distribution system from the day they leave the line. The cold start problem of "who to sell production capacity to" is readily resolved.

Tripod Stance, Global Synergy

With the Turkey base landing, Sentury will form a pattern where Thailand serves North America and Asia-Pacific, Morocco radiates Europe and Africa, and Turkey connects the EU and Central Asia, effectively dispersing trade policy risks. Referencing Morocco base's trajectory of turning profit within two years of production and obtaining Renault and Stellantis supplier qualifications, the Turkey project outlook is promising.

From Thailand to Morocco to Turkey, Sentury uses the strategy of "holding control + equity for channels + location positioning" to write another benchmark sample for Chinese tires moving from "product going overseas" to "overseas manufacturing + local service".