Turkey should support cheap loans for car buyers, group says

Turkey’s government should lend further support to the car industry such as implementing measures to reduce the costs of car loans, an industry body said.

Some 80 percent of cars in Turkey are purchased with the help of bank loans and most Turks can’t afford them because interest rates are too high, said Mustafa Akkalay, head of the Aegean Automotive Association (EGOD).

Recent measures by the government to lower taxes on new car purchases are welcome, but aren’t sufficient to revive sales, Akkalay said, according to Milliyet newspaper.

Troubles for Turkey’s carmakers deepened in October. Sales of motor vehicles slumped an annual 76.2 percent from a year ago after a fall of 68 percent in September, industry data published on Monday showed. Interest rates in the country have surged after the lira lost about a third of its value against the dollar this year. Inflation has accelerated to more than 25 percent, the highest level in 15 years.

Interest rates on car loans offered by Isbank, Turkey’s largest listed bank by assets, vary between 39.9 percent and 53.4 percent annually, according to the company’s website. State-run Halkbank is offering loans at a yearly rate of 46.1 percent.