Turkish slump in car sales deepens as economic downturn bites
A slump in sales of cars and light commercial vehicles in Turkey deepened last month as an economic downturn slashed demand.
Sales of cars dived 76.2 percent annually in October to 16,809 units, according to a report by the Automotive Manufacturers Association (OSD) published on Monday. The decline, the seventh-straight month that sales have fallen, followed a 68 percent drop in September a decrease of 51 percent in August.
Sales of light commercial vehicles, a gauge of the health of small and medium-sized companies in Turkey, slumped 76.5 percent to 21,571 units. The sales had fallen 68 percent in September and 53 percent in August.
The slump in demand comes despite a government measure in late September that increased the price at which higher taxes are levied on motor vehicles. Treasury and Finance Minister Berat Albayrak announced further steps on Oct. 31, slashing taxes on light commercial vehicles and cars with an engine capacity of 1,600cc or under.
Sales of cars and light commercial vehicles are at their lowest levels since a financial crisis in 2008 rocked economies across the world. Turkey’s economy has been reeling from a currency crisis this year that had erased nearly half of the lira’s value by August. The lira has since recovered partially, trading down by about a third against the U.S. dollar in 2018, but inflation and interest rates are now at the highest in 15 years.
Ratings agency Moody’s predicted last week that Turkey would experience an economic recession in the first half of next year. The economy is expected to contract by 2 percent in the whole of 2019 after growing 1.5 percent this year, it said.
Demand for exports of Turkish motor vehicles is partly offsetting the slump in demand at home. Exports rose an annual 6.9 percent in October to 127,062 units, while imports dived 77.4 percent to 13,950 units, according to the OSD.
Production of motor vehicles dropped 16 percent to 131,231 units, the data showed.