FILE PHOTO: A new logo of German carmaker Volkswagen at the VW headquarters in Wolfsburg, Germany September 9, 2019. REUTERS/Fabian Bimmer/File Photo

ISTANBUL (Reuters) - Volkswagen VOWG_p.DE has established a subsidiary in Turkey's western Manisa province, the country's Trade Registry Gazette showed on Wednesday, as the company nears a final decision on the location for its new production plant.

The Turkey unit will have 943.5 million lira ($164.21 million) capital and the parent company had paid a quarter of that amount, the gazette said. The remainder will be paid in the next two years.

The unit will focus on designing, producing and assembling automobiles, trucks and other vehicles, the gazette said.

VW had been looking into a possible new plant in eastern Europe, with Bulgaria known to be among countries considered along with Turkey.

A board member of the German carmaker told reporters last week in Berlin that the company is nearing a decision on building the new plant in Turkey.

A spokesman for VW told Reuters on Wednesday that the company was still in the final stages of negotiation and that it had not made a final decision on the factory.

A deal in Turkey could be politically controversial given European Union concerns regarding what it sees as constraints on freedom of expression and demonstration rights under President Tayyip Erdogan. VW’s argument is that Turkey is a candidate for EU membership.