German automotive giant Volkswagen's decision to establish a new production unit in Turkey with an investment of around 1.54 billion US dollars is expected to boost the recovering Turkish economy.

Ahead of a final decision that is expected very soon as negotiations are reported to be in the final stages, the German carmaker has established a subsidiary in Turkey's western province of Manisa, said the country's Trade Registry Gazette of Information Services Department on Wednesday.

Volkswagen Group will build the next-generation VW Passat and Skoda Superb midsize model lines at its new plant in Turkey. The factory will have a maximum annual production capacity of 300,000 vehicles, German and Turkish press reported.

The production is scheduled to start in 2022. The plant will focus mostly on export markets and create up to 5,000 jobs at the factory and surrounding suppliers, according to officials.

VW picked Turkey for the factory because of "positive macroeconomic conditions" including an 80-million population that rivals Germany's in size and its location amid growth markets, according to the company.

According to experts, this move, which is the single largest automotive foreign direct

investment in Turkey since the late 1990s, was hailed by the Turkish government which is trying to steer the country out of its first recession in a decade.

"The automotive sector has links with many other sectors such as logistics, tourism, construction, defense and agriculture. Therefore, this investment decision will have a positive impact on Turkey's economy and also on employment," commented Yunus Furuncu, a researcher from the Ankara-based think tank the Foundation for Political, Economic and Social Research.

The expert argued that the investment decision also showed that despite its troubles since currency turmoil in the summer of 2018, the nation's economy "offers more opportunities than many other economies."

"When political prejudices are put aside, investing in Turkey offers opportunities for businesses in terms of profitability and efficiency," said Furuncu.