Automotive market shrinks one-fourth in first quarter

ISTANBUL - Anadolu Agency

The combined sales of automobile and light commercial vehicles in Turkey declined 24.46 percent in the first quarter of the year compared to the same period last year, the Automotive Distribution Association (ODD) said on April 3.

In a report released through its website, the association announced their combined sales of automobile and commercial vehicles at 115,272 during the first quarter of 2014, whereas in the same period last year 152,604 vehicles were sold in Turkey – a 24.46 percent decrease year on year.

The sector’s performance was worst in March, when sales dropped 31 percent.

Some 114,434 cars were sold in the first quarter of last year, a 21.92 percent decrease to 89,347 units. The sales of commercial vehicles also dropped 32.08 percent from 38,170 to 25,925.

With the aim of raising the domestic savings rate and reducing the nation’s dependence on foreign capital to finance consumption, the Banking Regulation and Supervision Agency put hikes on car loan down payments, in use as of February.

According to the BDDK’s draft legislation, car loans will be limited to 70 percent of the total amount for vehicles that cost less than 50,000 Turkish Liras. The draft also foresees the restriction of consumer credit to a 36-month loan and car credit loans for 48 months.

The tough macro prudential measure coupled with New Year hikes on special consumption taxes and higher interest rates have caused the sector to record a 17 percent loss in February compared to last year.