Consumers in Turkey are finding it almost impossible to buy a car amid the rush for dependable assets in the country’s economic crisis marked by rampant inflation and the collapse in the value of the Turkish lira.

That was the complaint voiced to Timothy Ash, a veteran observer of Turkey at BlueBay Asset Management, as he spent last week in the country assessing the Erdogan administration’s battle against severe economic woes that could turn into a systemic crisis.

Noting that “inflation hoarding is pervasive” in Turkey, Ash wrote in a blog on his trip that “I was told that it’s almost impossible to buy a car—there are long delivery times, even though it’s impossible to get finance for more than 10% of the purchase price”.

Turks are typically looking to invest in cars, gold and cryptocurrency, with the lira down another 30% against the dollar in the year to date. 

The latest data on Turkish auto production will not, however, encourage local consumers looking to acquire a vehicle.

Turkish carmakers produced 119,000 vehicles in June, marking a 12.2% y/y decline, data from the trading group OSD have shown.

Passenger car output fell 12.3% y/y to around 76,000 vehicles, while light commercial vehicle (LCV) production was down 12% y/y to 43,000.

Turkey’s auto market expanded at 35.6% y/y last month with passenger car sales growing more than 40% y/y to 90,000.

Factories worked fewer days in June due to the extended Eid al-Adha holiday, a fact that may explain the marked decline in the production.

In 1H23, vehicle production rose 13.2% y/y to 735,000 units. Passenger car output increased 21% y/y to 462,400.

More than 581,000 vehicles were sold on the local market in January-June, pointing to a 55% y/y increase. The y/y rise in passenger car sales was also 55% y/y, taking the total to 430,000.

The automaking industry’s export revenues stood at $17.7bn in the first half, rising 14.6% y/y.

In June alone, export revenues increased by 8.8% y/y to $3.06bn.

Despite the beleaguered lira, the country’s passenger car imports in June leapt more than 68% y/y to 59,000. In the first six months of the year, Turkey imported 282,000 passenger cars, up 66% y/y.

Turkey last week hiked the tax on consumer loans by 5pp to 15% adding to difficulties for Turks looking to secure assets that will not shed value.