24 May 17

Turkey fleet sales to rise 18% in 2017

Turkey is stronger than its problems. As the economy recovers, fleet sales are expected to rise by 18% throughout 2017, as the fleet market hits the sweet spot on the road to maturity.

Nobody can deny that Turkey has had a turbulent past year. But neither the failed coup attempt in July last year nor the controversial referendum last month have managed to derail the country's economic recovery.

Rising output
March was the sixth straight month of rising industrial output for Turkey, and both business and consumer confidence have risen following the referendum. That referendum, on the expansion of presidential powers, was a close-run thing. 

But while the narrow Yes vote did not heighten tension within Turkey, it might jeopardise the close political and economic relationship the country enjoys with the European Union – albeit not in the short to mid term, analysts say.

Light-vehicle sales
In apparent contrast to improving economic figures, year-to-date results for light-vehicle sales were down. In all, 232,078 units were sold until April, 8.2% less than the first four months of 2016. But rather than a reflection of a weakening automotive industry, the lower results are a reflection of the record sales enjoyed by the industry last year.

The whole-year result for automotive sales will be at least 10% down, projects ODD, the Turkish Automotive Distributors Association. 

Most popular
Year-to-date, Renault was the most popular brand, with 31,126 units sold in the first four months (13,4% market share), closely followed by Volkswagen (28,700 units, 12,4%), Fiat (27,722 units, 11.9%) and Ford (27,072 units, 11.7%). Hyundai was a distant fifth at 14.510 units (6.3%). Completing the top 10 were Dacia (5.4%), Opel (4.8%), Toyota (4.2%), Peugeot (4.1%) and Mercedes (3.6%).

The Top 10 of the most popular models in Turkey (year to date) is led by the locally-manufactured Fiat Egea (9,664 units sold ytd), followed by the Ford Courier (9,390 units), Renault Clio (9,358), Ford Transit (6,924) and Fiat Doblo (6,878).

Future prospects
In Q1 2017, the share of fleet sales had increased to 23.2% of passenger vehicle sales. And fleet industry professionals are optimistic about the future prospects of fleet sales in 2017 and beyond. The Operational Leasing Industry Association TOKKDER expects the operational leasing market in Turkey to grow by nearly 18% throughout 2017, slightly lower than the figure for 2016, which was 19,3% - but still a very positive result. 

The reason for these healthy figures? In two words: sweet spot. Turkey’s fleet market is in that happy place where the transition to maturity is creating solid gains. While leasing is well established among multinational and larger local clients, the industry is now more actively targeting the SME segment, rich in growth opportunity as it is starting to recognise the advantages of outsourcing its fleets.  

Private Lease
Especially since in Turkey, the Special Consumption Tax and the consequent rise in car prices is making the shift from outright purchase to leasing extra attractive. As a result, operational leasing is spreading beyond Ankara, Istanbul and Izmir, the country's largest cities where it was first adopted, and into smaller cities like Adana, Antalya and Samsun (pictured). 

Fleet experts predict the evolution of operational fleet market in the coming years will be anything between “steady growth” and “rapid development”. And as in other rapidly maturing markets, it is expected that private lease will become a large part of this success story, as private consumers too become aware of the financial and operational advantages of leasing.  

Image: Cobija, CC BY-SA 4.0

Authored by: Frank Jacobs