Growth in Automobile Sales is Expected

Domestic light vehicle sales reached 30 thousand units in August, more than doubling year-on-year but falling by 61.5% on a monthly basis. The low base year effect and low interest rates stand out as the most important reasons for the annual growth in domestic vehicle sales in August. We would like to remind that with the end of the SCT incentives in June 2019, there was a decrease in vehicle sales in July and August. On the other hand, the increase in vehicle prices related to the increase in interest rates and the depreciation in TL in August caused a decrease in sales on a monthly basis.

The 265% annual increase in light commercial vehicle sales, which gained momentum with the increase in the weight of e-commerce sales due to the pandemic in August, exceeded the 106% annual growth in passenger vehicle sales. In the first eight months of the year, domestic light vehicle sales reached 68 thousand units, with an annual increase of 403%. In the rest of the year, in addition to the high base year effect, we think that the increase in interest rates, the increase in SCT rates and the increase in vehicle prices due to the depreciation of TL will negatively affect automotive demand.

According to the news in the press, after the SCT increase, the sector players' expectations of the previous 2020 thousand units for 750 fell to 600 -650 thousand (Is Yatirim: 650 thousand). Sector players are expected to make sales campaigns by sacrificing their profitability in order to increase their sales in the last quarter. As sector representatives expressed their expectations for strong vehicle demand in August, we do not expect the ODD data to have a very positive effect on automotive stocks. - Hibya

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