Turkey's automotive sector grows in 2013, braces for tough year ahead
ISTANBULTurkish automotive sales rose almost 10 percent year-on-year in 2013 as customers who wanted to avoid possible price hikes led by currency rates boosted demand toward the end of the year.
The automotive market sold 853,378 vehicles after a 9.72 percent rise, posting the second highest number of annual sales since 2011, the Automotive Distributors’ Association (ODD) said on Jan. 7. During the same period, passenger car sales soared 19.48 percent to 664,655 vehicles.
In December 2013, meanwhile, the market extended its sales by 12.4 percent compared to last year’s same month, reaching 129,718 units.
The sales raise in December was mostly driven by demand stemming from customers’ concerns that the steep devaluation of the Turkish Lira would result in price increases.
The weakening lira has already pulled prices upwards gradually, but sector representatives say the special consumption tax (ÖTV) hike introduced on vehicles at the beginning of the new year will sharpen that price raise in 2014.
The government hiked consumption tax on passenger cars by between 5 and 15 percent, depending on the size of the engine.
A regulation introduced to raise the down payment on car loans by the country’s banking watchdog, BDDK, is also expected to add to the sector players’ headaches.
The watchdog said curbing consumers’ use of credit cards to pay for goods such as cars with monthly installments will go into effect Feb. 1 as part of an effort to raise domestic savings rate and reduce the nation’s dependence on foreign capital to finance consumption.
The ODD’s 2014 sales forecast currently stands at 800,000-860,000 vehicles this year, although it has warned that last week’s tax hike on passenger cars and recent banking measures aimed at curbing Turkey’s growing current account deficit could dent sales.
Turkish Finance Minister Mehmet Şimşek said yesterday that the government would continue to support automotive sector investors in Turkey and abroad, while adding that that there were no plans to take extra measures that would soothe the auto market’s concerns.