Volkswagen has postponed the final decision on whether to build a car plant in Turkey, a company spokesman has said, amid international criticism of the country's military operation in Syria and concerns about potential reputational fallout.

"We are carefully monitoring the current situation and look with concern at current developments," the spokesman told Reuters on Tuesday.

Earlier this month, Volkswagen established a subsidiary in Turkey's western Manisa province while the company said it was still in the final stages of negotiation and that it had not made a final decision on the factory.

Other media reports said the plant would have capacity for 300,000 units a year and would build the redesigned Passat and Skoda's Superb.

According to Reuters, German chancellor Angela Merkel said on Sunday she told Turkish president Tayyip Erdogan the offensive must be stopped because it risked creating a humanitarian crisis.

European Union countries agreed on Monday to limit arms exports to Turkey, while US president Donald Trump imposed sanctions on the country, the report added. 

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