Sales in Turkiye’s automotive market rose significantly in December as consumers increased their purchases after a government decision removed uncertainties over the new special consumption tax (SCT).
The sales in the markets are expected to be around 120,000 vehicles in December, with forecasts for the full-year sales at between 780,000 to 800,000, according to people from the industry.
They added that it all depends on car availability and access to car loans.
The expected sales between 780,000 to 800,000 will mark the highest annual figures to be achieved in the past five years.
Some 116,000 units were sold on the domestic market on average in the past 10 years, while the combined sales of passenger cars and light commercial vehicles stood at 737,000 in 2021.
More new cars are arriving in Turkiye in the final quarter of this year,which is another reason behind the increase in sales, the people said.
But, demand is strong in the market mainly because consumers released pent-up demand, thinking that prices could go higher in 2023. People buy cars as they view them as an “investment.”
“Some carmakers were able to bring more vehicles to Turkiye in November and December. We expect sales to be above 120,000 vehicles in December,” said Alp Gülan, board chair of Gülan Otomotiv.
He added that some potential consumers cannot buy cars because they don’t have access to loans.
Gülan noted that sales increased in December because of the combination of several factors. “Uncertainties regarding the STC are now over. People think prices will go up in 2023 and demand from car fleet leasing companies.”
Last month, price thresholds for a special consumption tax (SCT) on vehicles were updated, a move that was expected to lead to lower prices for certain models.
The lower SCT limit was raised from 120,000 Turkish Liras ($6,400) to 184,000 liras for vehicles with engines smaller than 1600cc, while the upper limit was hiked from 200,000 liras to 280,000 liras.
The automotive market expanded nearly 37 percent in November, according to the latest data from the Automotive Distributors and Mobility Association (ODMD).
Passenger car sales grew 38 percent year-on-year to more than 59,000, while the increase in light commercial sales was up 34 percent from November last year to 23,000.
Meanwhile, the stocks of carmakers traded on Borsa Istanbul have increased 220 percent since the start of the year, with Anadolu Izusu and Doğus Otomotiv rising 656 percent and 340 percent, respectively.
Karsan shares have been up 268 percent.