Turkey’s car and light commercial vehicle sales in 2018 fell 35 percent year-on-year, according to the Automotive Distributors’ Association (ODD) figures. The slump deepened in December, despite deep cuts by VAT and Special Consumption Tax by the government to aid the industry. The 2019 outlook doesn’t look better comments equity analyst Mr. Serhat Kaya.
A total of 620,937 automobiles and light commercial vehicles were sold last year, down from 956,194 in 2017, the association said in a statement.
Cars constituted the most of last year’s sales, with 486,321 automobiles sold, down 33 percent from a year earlier.
Light commercial vehicle sales also dropped by 42.3 percent on a yearly basis to reach at 134,616 in 2018.
December was bleaker
December new auto sales were 78k units in Turkish market, registering 43% contraction over a year ago.
Demand contraction in Turkish auto market continued, while the support from 15% special consumption tax-cut only slowed the pace of contraction in November and December. FY18 sales of 621K units was down by 35% and broadly in line with estimates.
In terms of market shares, TOASO recovered its share to 15.8% from 11.1% in November, but the company’s FY18 market share of 11.7% was still down by 1.1 pp.
DOAS market share was stable at 18.2% on the month, while the company lost 0.8 pp market share in FY18.
FROTO market share was up by 1.0 pp to 9.8% compared to previous month. For FY18, Ford also lost 1.1 pp market share from 11.6% to 10.5%.
As all listed players lost market share in 2018, gainers in passenger car segment were Honda (+2.2 pp), Peugeot (+1.0 pp) and Nissan (+0.6 pp). On a segment basis, LCV sales posted 42% contraction in 2018, which was worse than 33% contraction in passenger cars. Note however that government paved the way for companies to lease commercial vehicles starting in 2019. This was long awaited move by local LCV producers and could support LCV sales by shifting some corporate demand from passenger cars to LCVs.
Our estimate for 2019 total sales currently stands at 450K, implying 27% contraction over 2018. Companies are likely to release their 2019 guidance after FY18 results in February. (Serhat Kaya, Yatirim Finansman)