While the rise in prices of cars sold in Turkey continues to surprise, sector representatives shared the current state of the market and their expectations.
List prices for Kilometer Zero cars rose significantly in July due to an appreciation in the exchange rate, an increase in VAT to 20 percent, and the expiration of the SCT tax base as all cars entered the 80 percent SCT segment.
AVERAGE CAR PRICES
According to Hürriyet News, according to the data compiled by the car company Cardata, the average price of 922 different new cars for sale in Turkey as of July 2023 has reached 2 million 999 thousand Turkish lira. The average price of low and medium segment cars, which account for almost 90 percent of the cars sold, was TL 896,591 for segment A cars, TL 1,223,000 for segment B cars, and TL 1,672,792 for segment C cars.
LUXURY AVERAGE NOW 10 MILLION
While the average price of new D-segment cars, known as large family cars, was TL 3,149,437 as of July 2023, the average price of E-segment cars has increased to TL 5,71,740, and the average price of luxury F-segment cars has increased to TL 10,25,355. On the other hand, the increase in the average price of electric vehicles attracted attention. Accordingly, the average price of 100 percent electric vehicles (BEV) sold in Turkey was TL 3,236,385, while the average price of full hybrids (HEV) was TL 2,787,814 and the average price of small hybrid vehicles (MHEV) was TL 4,63,726.
THE STABLE PERIOD IS COMING
Responding to questions about whether sales will decline due to high prices when investment demand for new cars stops, Murat Berkel, CEO of Hyundai Assan, said: “I predict that interest rates on deposits will gradually increase and purchases of investment vehicles will decrease with a possible increase in the interest rate of the Central Bank. In this case, sales will slow down, as in September and October. Maybe we are in for a stagnant November-December, which we did not expect at all. At this point, the base SCT limits need to be updated so that those who really need it can get to the car. At the same time, the terms of car loans should be reviewed. Otherwise, we may have difficulty selling cars when the market returns to normal levels,” he said.
ARE THE PRICES FALLING?
Cardata CEO Husamettin Yalchin said: “Zero mileage vehicle sales will continue in the range of 90,000-120,000 units per month until the end of the year if there are no difficulties in getting a loan. At the end of the year, it is very likely that sales will exceed 1 million units a long time later. Distributors make a surcharge at least twice a month on average as part of an increase in the rate and cost. As long as the exchange rate, interest rate and inflation are not in balance with each other and there are no tax breaks, the prices of Kilometer Zero cars will not go down. The exchange rate is currently the most defining and dominant factor in the prices of Kilometer Zero vehicles,” he said.