Demand expected to shift to used cars after July

ISTANBUL

Consumer demand is expected to shift toward used cars as a new safety regulation and tariffs on Chinese will push up prices of brand-new cars.

The General Safety Regulations 2 (GSR2), which will come into force in early July, will add more costs to some cars according to representatives of the auto industry.

Especially prices of cars that do not comply with the new safety regulation will go up, they said, noting that companies offered discounts of up to 20 percent in the last two months before GSR2 takes effect.

The other factor which will impact prices, sales and the direction of demand, is the new customs duty on imported Chinese cars. Earlier this month, Türkiye announced a 40 percent additional tariff on imported fuel and hybrid passenger vehicles from China to take effect on July 7.

The price of Chinese-made cars is expected to increase by 30 percent due to the new tariff, according to experts.

Many brands will breathe a sigh of relief as the competition pressure from Chinese cars will ease, said Kağan Dağtekin, the CEO of Doğan Trend Otomotiv.

“We anticipate a recovery in used car sales in the final quarter of the year,” said Hüsamettin Yalçın, the CEO of Cardata.

Due to the promotion campaigns, the price difference between brand-new and used cars has narrowed, Yalçın explained, adding that the decline in second-hand car sales will continue into the final quarter of 2024.

But their sales are likely to pick up in that quarter, he said.

Yalçın acknowledged that because of the stiff competition from Chinese brands European carmakers were not able to hike their prices.

As the tariff on Chinese cars takes effect, this pressure will wane and European brands will increase prices for their cars, he said.

“Large and established Chinese brands will not exit Türkiye but they will try to implement different marketing, sales and pricing strategies,” Yalçın said.