Having displayed a monthly performance similar to that of years with the highest car sales ever, the automotive market has signaled it could again approach the level of million units in sales.
Passenger car and light commercial vehicle sales nearly doubled in February, as they jumped 89.5% year-on-year, according to Automotive Distributors’ Association (ODD) data. Around 47,122 automobiles were sold last month, compared with just 24,875 units sold in February 2019.
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 of last year, indicating that the upward trend observed at the start of the year continues.
The figures last month turned out to have approached levels of February months in 2015, 2016 and 2019, when annual units sold had neared 1 million.
Turkish citizens purchased some 55,331 units, including 40,817 passenger and 14,514 light commercial ones, in February 2015, when the total market amounted to around 968,017 units. The difference between the February months of 2015 and 2020 stands at 8,209 units with a 17.42% decline. This rate is over 47% when February 2019 is taken into consideration.
The market saw 40,588 passenger cars and 12,237 light commercial vehicles being sold in the same month of 2016, when the total market closed the year with 983,720 units. The difference drops to 5,703 units when February months of that and this year are compared.
As for the same month of 2017, when the total automotive market reached 956,000, Turkish citizens purchased 46,965 passenger cars and light commercial vehicles. The difference between the February months of 2017 and 2020 drop to just 157 units.
The market has, however, managed to exceed the performance of the same month of 2018, when the citizens acquired 47,009 passenger cars and light commercial vehicles. The market closed the year with 620,937 units sold.
Overall, sales last month jumped 6.73% when average February sales of the last 10 years are considered. The ODD kept unchanged its projection of between 574,000 and 625,000 of new car sales for the entire 2020.
‘Figures point to 750,000 units this year’
An intense demand among citizens for new vehicles since December of last year ended in a shortage of new cars. Currently, the wait to receive a new car extends into April.
The positive atmosphere is also expressed by the senior executive of companies that dominate the market and the heads of associations.
“The highest February was 55,000 units (sold). Therefore, with 47,000 units sold, we have a February month that nearly catches up a Turkey with 1 million units,” said Murat Şahsuvaroğlu, the head of the Authorized Automotive Dealers Association (OYDER).
“But let’s not forget that there is a demand postponed for the last two years. There is a market that closed 2018 with 620,000 units and 2019 with 479,000 units,” Şahsuvaroğlu said, stressing that obstacles in front of the market have been gradually eliminated with government support and a positive channel has been established between the consumer and the dealer.
In case the tempo continues at this pace, the market will approach the figure of 1 million, he continued. “One would wish for the market to again reach 1 million, but the important thing is to grow solidly and to grow steadily. These figures point at 700,000-750,000 (cars sold) this year.”
Şahsuvaroğlu said the market could easily reach these figures with the balance in exchange rates, and given negative developments do not take place at home and abroad.
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, brought some relief.
Overall, passenger car and light commercial vehicle sales jumped by 89.6% year-on-year to around 74,395 vehicles in January and February of this year, the ODD data shows. 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 the two months 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 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.
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