Page 76 - TURKRptOct19

9.1.2 Automotive sector news
In July, the Automotive Distributors’ Association (ODD) cut its vehicle sales prediction for 2019 to 340,000-380,000 units from a previous 350,000- 400,000 after tax cuts expired at the end of June.
In 2018, Turkey’s automotive market contracted 35% as a total of 620,937 units of passenger cars and light commercial vehicles (LCVs) were sold versus 956,194 units in 2017.
Turkish carmakers pin hopes on lower interest rates. “The central bank’s decision [to slash the policy rate] was a step taken in the right direction. This will probably push the monthly interest rates on car loans down to 1 percent, which in return may have a positive impact on first-hand vehicles sales,” Ali Bilaloglu, head of the Automotive Distributors’ Association (ODD), told state- run news service Anadolu.
“Car prices, which include forex rates and taxes, consumer confidence and financing conditions all determine demand. We observed in the past that when the cost on car loans eased toward 1%, the market expanded,” he added, noting that total vehicle sales on the Turkish market could reach 400,000 units this year, slightly higher than the ODD’s initial forecast of 350,000.
Bilaloglu noted that the ODD had not yet collected new estimates from its members in the wake of the interest rate cut.
Data from the central bank showed that the annual interest rate on car loans
76 TURKEY Country Report October 2019 www.intellinews.com