Sales of passenger cars and light commercial vehicles in Turkey increased 127.5% year-on-year in October, the Automotive Distributors Association (ODD) stated.
The increase comes after an 82.35% year-on-year increase in September, both of which come in the middle of a drop in borrowing costs since the Central Bank of the Republic of Turkey (CBRT) kicked off an easing cycle in its monetary policy in July.
The CBRT’s cutting of its benchmark policy rate – the one-week repo rate – came after a campaign initiated by public lenders to spur domestic demand and that offers cheaper loans to civilians when they purchase domestically-made vehicles from select manufacturers.
Passenger car and light commercial vehicle sales in October increased to 49,075. They had plummeted 76.5% in October last year to 21,571 units.
Passenger cars made up the bulk of October’s sales, with 39,996 automobiles sold, increasing 138%, whereas light commercial vehicle sales soared 91% during the same duration.
In the January-October period of this year, sales dropped 31.9% on a yearly basis to 330,384, the association stated. Amid a high surge in sales, it also went on to revise its sales forecast for this year to 450,000-500,000 vehicles from an earlier forecast of 340,000-380,000.
The association stated its first market forecast for 2019 at 525,000-575,000. The mid-point of forecasts indicates that the sector is projected to increase by 16% in 2020.
The recent boost comes after months-long narrowing in the market, that has been contracting since last April. High volatility in foreign exchange rates, followed by a high boost in interest rates on loans resulted in a sharp decrease in domestic demand.