Turkish car sales at lowest in 4 years show economic woes
Turkish car sales slid to the lowest level since 2014 in May, in a further sign that economic growth is slowing.
Passenger car sales slumped an annual 13 percent to 57,227 units after the lira slumped against the dollar, crimping demand for imports and reducing demand for car loans as interest rates surged. Sales of commercial vehicles dropped 19 percent to 17,535 units, led by a decline in sales of vans, according to data published by the Automotive Manufacturers Association at the weekend.
Total production of cars for domestic consumption and export fell 8.6 percent yearly to 95,677 units.
Turkey’s lira weakened to a record low of 4.92 per dollar in May, forcing the central bank to intervene with a rate increase of 300 basis points amid concerns about an impending currency crisis. The bank followed that up in June with a further hike of 125 basis points 17.75 percent, the highest level in major emerging markets outside of Argentina.
Interest rates on most car loans now exceed 20 percent annually.
Turkish President Recep Tayyip Erdoğan said on Monday that the country’s strong economic growth would continue after posting a 7.4 percent expansion in the first quarter. Most economists say the rate hikes, along with inflation of 12.2 percent and declining consumer and business confidence, signal a significant slowdown in growth.
Erdoğan is seeking re-election at polls on June 24.