Page 77 - TURKRptOct19

charged by local banks was 20.8% as of September 13 versus 12.95% on housing loans.
Car loans stood at TRY5.8bn as of mid-September, down as much as 15% from a year ago.
State lenders cut borrowing costs on loans for made-in-Turkey cars. Turkish state-owned lenders Ziraat, Halkbank and Vakifbank have slashed their monthly interest rates charged on loans for made-in-Turkey cars in a move that should support local production and stimulate demand for the country’s ailing automakers.
In a joint statement on September 26, the public banks said that they had lowered the borrowing costs on loans for 18-36 months as regards passengers cars produced in Turkey, and sold at prices between Turkish lira (TRY) 50,000 and TRY120,000, to 0.49%-0.69%.
The trio of banks have signed agreements with passenger car producers Fiat, Honda, Hyundai and Renault Mais.
The lenders will also extend 30-60 month loans at the monthly interest rates between 0.49% and 0.69% for commercial vehicles sold between TRY72,000 and TRY120,000 and produced in Turkey by Fiat, Ford, Isuzu Karsan and Temsa.
The new interest rates will be valid until the end of this year.
Data from the central bank, released on September 26, showed that car loans extended by local lenders declined by 1.47% on a weekly basis to TRY4.26bn as of September 20.
Auto sales in Turkey soared 82.3% y/y to 42,000 units in September, marking the first annual increase since March last year, data from the Automotive Distributors’ Association (ODD) showed on October 2.
The strong rebound in vehicle sales was almost certainly driven by reduced loan costs that followed central bank monetary easing.
The latest data showed that 35,308 passenger cars were sold on the local market, translating to a staggering 101% increase on an annual basis.
Light commercial vehicle (LCV) sales, on the other hand, increased 23% y/y to 6,700 units.
In the first eight months of the year, however, the local auto market, contracted 39% from a year ago with passenger car sales declining nearly 37% y/y to 228,000 units. LCV sales plunged 48% y/y to 53,000 in January- September.
Many analysts believe that Turkish car sales will gather pace in the remainder of the year thanks to the lower borrowing costs now available.
Data on the central bank’s website showed that the annual interest rate on car loans declined to 19.7% as of September 20 from 22% a month previously. In June this year, the borrowing cost stood at as much as 28%.
Turkey's Vehicle Industry
(units)
Aug
y/y
Jan-Aug
y/y
P. Cars Production
31,287
7%
610,222
-11%
77 TURKEY Country Report October 2019 www.intellinews.com