“Automotive is no longer an investment vehicle”

Honda Turkey Senior Deputy General Manager Bülent Kılıçer drew attention to the fact that automotive purchases for investment purposes have ended. Kılıçer said that a few issues such as exchange rates and credit will be important in determining where the sector will go from now on. Kılıçer made assessments regarding the latest situation in the automotive market to AA at the press launch of Honda's new hybrid model ZR-V e:HEV held in İzmir. Stating that the automotive market will push the 1 million level this year, Kılıçer said that it may fall slightly below this level. Kılıçer said, "However, where we will go in the following periods depends a lot on what 3-4 issues will happen. First, where will exchange rates go? Second, where will the credit availability rate go? Third, will we experience a new supply shock? Will there be new variants? Of course, where will prices go and the credit part are very, very important." Drawing attention to the fact that automotive purchases for investment purposes have ended, Kılıçer said, "Automotive has definitely ceased to be an investment vehicle in the last 2-3 months. It is sold entirely based on need. However, it should also be said that in the previous period, the frequency of changing automobiles, which may vary from brand to brand in Turkey, was between 3.5-4 years on average. At this point, the period has slowly started to lengthen. In other words, it has started to increase to 5 years, 5.5 years." Stating that order cancellations have also occurred for some models, Kılıçer noted that in the current situation, there are those who have waited for a long time or who wanted to buy as an investment vehicle but gave up on purchasing under the current conditions, and that there are also various campaigns. "I see the steps taken by the Central Bank of the Republic of Turkey as very positive" Evaluating the steps taken by the Central Bank of the Republic of Turkey, Kılıçer stated that a very serious effort is being made to make the next period a little more predictable with the steps taken. Stating that this is also slowly starting to happen, Kılıçer continued his speech as follows: "So when you look today, exchange rates have now settled into a stable place. At least we can predict more or less what the next step will be and its effects. This positively affects the part of predictability, whether in the housing market or the automotive sector. In this sense, I see these steps as very positive. The market will remain slightly below 1 million in the next period, but when we compare it with previous periods, it will actually subsidize the amount that we experienced during that pandemic period, which was below the expected level. Stating that they expect the campaigns to continue in the next period, Kılıçer said, "I think that these campaigns will continue at least until the end of the year, and even considering that exchange rates and inflation are more or less at these levels, this campaign period, in other words, 'normalization' in quotation marks, will continue in 2024 and even 2025." Bülent Kılıçer pointed out that the discount and campaign period for new vehicles will also affect the second-hand market and cause prices to decrease. Noting that the period of second-hand vehicles being sold above their new prices is now over, Kılıçer concluded his words as follows: "With the current campaigns and the slight decline in demand, we have seen that second-hand prices have also dropped significantly. I think this situation will continue for a little longer in the following period. If we expect these campaigns to continue and even deepen, especially towards the end of the year and into early 2024, I think that a decline here may also occur in the following period."