Richest 20 pct buys most cars, taxes hinder market
ISTANBUL - Anatolia News Agency
Some 81.5 pct of cars are bought by the richest 40 pct in Turkey. The vehicle ownership rate is still low in the country.The richest 20 percent of the Turkish population buy 55.6 percent of the total vehicle sales in Turkey, according to a report issued yesterday by the Automotive Distributers Association (ODD). Added to the next richest 20 percent of the population, the ratio hits 81.5 percent.
The ODD report highlights the effects of pricing, income per capita and loan volumes on the local automobile market’s growth.
Although the imbalance of vehicle ownership in between income brackets has improved during the last years, Turkey falls behind developed Western countries and Europe in terms of average vehicle ownership rate.
The number of passenger cars per 1000 people is 965 in the United States, 318 in Eastern European countries, 641 in Europe, and 340 in South Korea.
The figure rose to a mere 141 in Turkey thanks to improvement in recent years. The share of Turkish youth in the total population that can potentially drive passenger cars, which is much higher than Europe, lags significantly behind the local automotive market’s potential, according to the report.
One of the main obstacles to the local automobile market growing is the exorbitant Special Consumption Tax (SCT). If the SCT was at 18 percent, automobile sales would exceed 1 million in 2016, whereas if the tax was at 27 percent, the sales figure would surpass 930,000 in the same year.
The SCT increased in October 2011 to 80 percent from 60 percent for cars with engines between 1,600 and 2,000 cc, and to 130 percent from 84 percent for cars with engines larger than 2,000 cc. Car sales was down about 17 percent and light commercial vehicle sales were down 29.2 in the first five months of the year, according to a separate ODD report issued last month.
The total number of vehicles registered in Turkey exceeds 12 million, half of which are twelve years old or more, as of the end of 2011, the report said. The rate of vehicles older than 16 years is 34 percent, and the rate of vehicles older than 20 years is 20 percent.