Auto manufacturers seek relief in easier vehicle loans
Posted by meb at December 1st, 2008
The Turkish automotive industry is expecting to see a contraction in sales of 10-15 percent this year compared to 2007, but is confident that this tightening of the market will not happen if banks loosen their grip on extending vehicle loans and make the conditions for loan arrangements easier.
The chairman of the Automobile Distributors Association (ODD), İbrahim Aybar, said things would get worse in the automotive sector unless a solution to the effects of the global financial crisis is found shortly.
Speaking to the Anatolia news agency yesterday during the Mersin Automotive and Commercial Vehicles Fair (MOF) 2008, organized by the Mersin Chamber of Commerce and Industry, he said the sector had achieved a very good start for 2008 after brisk sales in 2007. “Our target was to enjoy another good year just like 2007 and we were more or less achieving this goal until October. But then banks started to slow down their rates of approval for vehicle loans amid the global financial turmoil. Customers are willing to purchase vehicles, but they face trouble in getting the necessary financing. Once this problem is overcome, Turkey will again become a good market for automobiles,” he said.
Despite the poor trading conditions, he said sales number are expected to exceed 500,000 this year. “We will try not to fall below this number next year,” he said, but he added that a 25 percent drop in sales is still very likely. “Turkey’s conditions are very dynamic and everything is always subject to change,” he asserted.
Turkey’s automobile sector has big domestic sales potential, according to Aybar, who said there are 93 cars per 1,000 people in Turkey. If the barriers to financing were lifted, then the industry would be spurred on by this new demand, he estimated.
On the year-end sale offers in the automobile market, Aybar said there were “tremendous advantages,” since the sale prices are also discounting the recent rise in costs of raw materials. He explained that the last months of every year see the highest numbers of car sales as a result of enticing offers from auto manufacturers trying to get rid of excess stock. He added that they usually slash their prices dramatically to hit year-end sales targets and to clear their inventories, which, every day, add extra to the cost of selling cars. Companies that offer the most flexible financing instruments in the shortest amount of time will achieve a leading position against other players in the auto markets, he claimed.
source: Today’s Zaman
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