Dear friends,

The Automotive Distributors Association (ODD) announced  recently the passenger and light commercial vehicle sales in our country for October 2019. Total monthly sales of 49,075 units show an increase of 127.5% compared to the same month last year. In total, we reached 330,384 sales cumulatively. This figure still represents a 32%  year on year contraction compared to 2018, despite sharp increase withnessed in October.
There is a very important factor affecting sales growth on a monthly basis. The monthly loan interest rates for those up to 120 thousand TL among locally produced motor vehicles were reduced to 0.5% by the state banks. On the other hand, the decrease in loan interest rates on sales of other motor vehicles to 1.4% per month also seems to have contributed to sales rhythm. 
The first message we will get here is : As I already commented after July, sales are naturally triggered by monthly loan interest rates of 1%  or less. The accumulation of our citizens is not enough to buy an automobile. They have to apply for a loan. Then the monthly installments of the loan should be payable within the monthly income of our citizen. This is where low interest plays a critical role.
We’re in the last two months of 2019. Automotive professionals in Turkey know very well. The last three months of the year are ”holy” months in the industry. Because the most sales take place in this last quarter. Especially month of  December is considered as  Sultan of the eleven months .  At least twice the monthly sales average for the year is experienced only in December.
Now here is  the second message : This year’s sales had shrunk by almost half from last year through September. Distributors did not increase their stock as there was no need to produce without sales. They kept the stock level suitable for the projected 350 thousand market. However, now what we say that we would hit 500 thousand sales at the year end.. So how will the stocks last? Due to the Lead-time period between the order and delivery, which takes an average of 3 months especially in the sector, many distributors placed orders before October. So it looks like December sales will be based on stocks, not on demand. There may be no sales in certain brands and models . Maybe domestic brands can manage some flexibility, but those who sell imported products will be forced more. Will December be a Sultan of 2019? We shall see. 

See you in my next article,

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