Price hikes in best-selling cars cannot keep up with inflation

ISTANBUL

The prices of certain best-selling cars in the Turkish market are struggling to keep up with soaring inflation, even declining in real terms.

This is happening at a time when vehicle sales are forecast to exceed 1.2 million units, touching a new all-time high this year.

The intensifying competition among carmakers, General Safety Rules (GRS2) and the pressure from inventories are the key factors that lead to moderate increases in car prices in 2024 compared to the previous years, according to experts.

When adjusted for inflation, the prices of eight of the best-selling top 10 cars have declined in real terms so far this year.

The annual transport inflation rate, which includes car prices, stood at 26.2 percent as of November, according to official data.

For instance, the price of Fiat’s Egea Sedan model, which is the best-selling car in the Turkish market, plunged 19.7 percent in real terms while the nominal increase was 6.5 percent in December compared to January to 889,900 Turkish Liras.

The declines in prices in real terms for Renault’s Clio and Megane Sedan models were 1.5 percent and 6.1 percent to 1.07 million liras and 1.55 million liras, respectively.

The price of the T10X model of domestic EV maker Togg, the top-selling car in its segment, was unchanged from January to December but fell more than 26 percent in real terms. It is currently selling for 1.43 million liras.

As for the cars Chinese company Chery sells in Türkiye, the price of its Tiggo 7 Pro model surged 14 percent in real terms to 1.68 million liras, while it fell 3.5 percent for the Tiggo 8 Pro to 1.83 million liras. Chery jacked up the price of Tiggo 7 Pro as it is subject to an additional 40 percent tariff.

One of the only two brands whose price increased in real terms was Toyota’s Corolla. This model’s price surged 33.7 percent in nominal and 7.5 percent in real terms to 1.39 million liras.

The local auto market expanded by 5.3 percent in November to 121,094 units with passenger car sales rising 3.5 percent annually to around 95,000.

In the first 11 months of 2024, a total of 1.07 million vehicles were sold, down 0.5 percent from a year ago. Passenger car sales inched up 0.5 percent year-on-year to 845,530, the Automotive Distributors’ and Mobility Association (ODMD) reported earlier this month.

The picture is no different in the used car market.

Prices of second-hand cars — adjusted for inflation — have been on a decline in the last 16 months, according to a report by BETAM.

Similarly, data from VavaCars, an online platform for used cars, showed that prices rose 16 percent, which was below both the transport inflation and consumer price inflation of 47 percent.