Maintaining an upward trend, passenger car and light commercial vehicle sales in Turkey almost doubled in January and February this year, data by an industry group showed Tuesday, signaling a period of swift recovery for the industry.
Sales jumped by 89.6% year-on-year to around 74,395 vehicles in the first two months, Automotive Distributors' Association (ODD) data revealed. The figure was up from 39,248 units sold in the same period in 2018.
Surging demand for passenger cars helped prop up sales growth as they jumped 98% year-on-year in January and February to 59,743. Light commercial vehicle sales recorded a 62% year-on-year increase to 14,652, up from 9,064 units a year earlier.
The industry had faced multiple problems after high volatility in foreign exchange rates in the second half of 2018, followed by a high increase in interest rates on loans, which led to a sharp decline in domestic demand.
Last year was rather difficult for the industry, as passenger car and light commercial vehicle sales declined by 22.8% year-on-year to 479,060. Several measures, including tax exemptions, incentives and a cheap loan campaign by public lenders, relieved the market, which is optimistic about its performance in 2020.
The automotive market sales figures were around 1 million units during 2015 and 2017 but dropped to 670,000 in 2018, before declining further last year.
Sales almost doubled in February
In February, car and light commercial vehicle sales jumped 89.5% year-on-year, ODD said, as more than 47,000 automobiles were sold last month.
Passenger car sales surged 96.44% in the same period to some 37,727, while almost 9,400 light commercial vehicles were sold in the month, up 65.7% from the same month last year.
The increase in the first two months follows an upward trend that started in September 2019 amid a drop in borrowing costs since the Central Bank of the Republic of Turkey (CBRT) started slashing interest rates in July.
A decline in inflation allowed the CBRT, which had hiked its key policy rate to 24%, where it stayed until last July, to slash rates by 1,325 basis points down to 10.75% since then to boost growth.
It was followed by a campaign initiated by public lenders in late September to spur domestic demand by offering cheaper loans to citizens when they bought domestically made vehicles from select manufacturers.
In the meantime, the Automotive Distribution Report (ODD) also showed that Turkish drivers’ demand for small-engine vehicles is increasing.
According to data, vehicles with an engine capacity lower than 1600 cubic centimeters surged 98% year-on-year in February while the sale of cars with 1600-2000 cc engines fell 13.9% and cars with engines over 2000 cc decreased by 29.4%.
Meanwhile, a total of 2,128 hybrid cars and 80 electric cars were sold in February.
Turkey is particularly working to boost the sales of hybrid and electric automobiles while focusing on developing and using low-consumption and environmentally friendly automobile technology in upcoming years. The country announced its first fully domestically produced electric car recently.
According to the report, automobiles with the emission rate of 100-120 grams CO2 per kilometer had the biggest share of new car sales in February with 39% in terms of emission values.
In the same period, diesel car sales decreased by 43.4%, while the share of cars with automatic transmission jumped by 71%. The overall demand for cars with lower tax segments increased and made up 85% of the total car market in February.
Among light commercial vehicle sales, van-type vehicles' share was 74.45% with 19,909 sales in the same period, followed by light trucks (11.4%) with 1,680 sales, minibuses (7.5%) with 1,107 sales and pick-ups (6.5%) with 956 sales.
The ODD said the number of new car sales in Turkey was expected to reach between 574,000 and 625,000 in 2020.
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