The Turkish auto market collapsed in July. Vehicle sales plunged 66% on an annual basis to 17,927 units, data from the Auto Distributors’ Association (ODD) shows.

The figure was the third sharpest decline within the past year, following the 77% y/y contraction in October and the 68% y/y fall the month before that. Highly significant is the fact that tax cuts the government granted in a bid to revive sales of vehicles expired at the end of June. Automakers appeared to have become hooked on the tax generosity as a means of achieving anything like respectable sales figures in an economy struck by a biting recession.

In the seventh month, 15,000 passenger cars were sold, which translated into a 63% drop from a year ago, while the light commercial vehicle (LCV) market—which provides some important clues on economic activity—shrank 76% y/y to just 2,500 units.

Renault was the market leader with 2,800 sales in July, followed by Fiat which sold 2,116 cars. Hyundai was the third largest seller with 1,500 units while Toyota was fourth over the line with 1,398 units. Volkswagen’s sales amounted to 1,291 units.

The ODD report also showed that one Maserati, one Ferrari, two Aston Martins and three Lamborghinis were sold in Turkey in July.

In January-July, the market shrank 47.5% y/y to a total of 213,000 units. In the first seven months of the year, passenger car sales declined 46% on an annual basis to 172,000 units. LCV sales nosedived 53% y/y to 41,000. On the first-half basis, the tax generosity clearly failed to produce the hoped for results, but things would have been much worse without it. Car industry representatives are calling for tax cuts to be made permanent as are their counterparts in other big consumer industries such as white goods.

 The latest consumer sentiment survey showed not a glimmer of hope for the local car market. The headline consumer confidence index declined by 2% in July from June. The sub-index measuring consumers’ assessments of the general economic outlook for the next 12 months fell a steeper 0.8% m/m. It had risen 5.4% y/y in June.

The survey also showed that the sub-index measuring the probability of a consumer buying a car in Turkey in the next 12 months eased to 1.6 in July from 5.5 in June.