Trading vehicles to cover credit card debts
Güncelleme Tarihi:
by Sevda Yüzbaşıoğlu - Referans
Oluşturulma Tarihi: Mart 24, 2009 00:00
ISTANBUL - Some people chose to remain cautious and head over to used car dealers to sell their vehicle. Some others, infatuated by low prices, cannot help themselves from dipping into the money they have been saving under their pillows
The customer profile at Doğuş Oto Değerlendirme, or DOD, which focuses on used car sales, has changed drastically since the global economic crisis, according to a company executive.
"The majority of our customers are now those who sell their secondary cars to pay their credit card debts," said DOD General Manager İlhami Eksin.
Vehicle sales have declined drastically at DOD, a Doğuş Otomotiv affiliate. The company sold nearly 3,000 vehicles in the first two months of 2008 but has sold only 2,100 vehicles in the first two months of this year.
The customer profile has also changed drastically, Eksin said. "Most of our customers have two cars, and they are looking to sell one of them or they want to switch to an older model due to economic strains. A whole lot of people are also after paying their credit card bills by selling their cars."
Private consumption tax
The Turkish government's new financial package, aimed at curbing the impacts of the global financial crisis, came into effect with its publication in the Official Gazette on March 16. The $3.2 billion package reduced private consumption tax, or ÖTV, rates in the automotive, white goods and housing sectors for three months to provide an impetus to the sluggish economy.
"Currently consumers have no interest in used cars. Things will go back to normal as the prices in the new car market settle down. We are expecting activity to pick up in the secondhand auto market as of early April," said Eksin. "Many customers are seeking economic vehicles such as Toyota and Hyundai," he added. "The biggest increase has been experienced in the number of vehicles received from fleet-rental companies."
"The re-marketing of the incoming vehicles is a quite important networking business and our efforts to sell vehicles have been more successful than originally expected," said Eksin. "Our goal is to auction 12,000 vehicles this year." Eksin also revealed DOD was seeking a foreign partner.
The government’s ÖTV discount on automotives seems to be paying off. "Sales have been declining an average of 25 percent each month since the rumors of the crisis began," said Mehmet Araz, sales manager of Neskar, the Bursa distributor of Opel and Chevrolet, but that has changed with the ÖTV discount announcement. "The industry is experiencing a major boom in sales, with a daily average of 23 to 24 vehicles," Araz said. "We have run out of some models, and it is hard to tell the company abroad to ’produce and send quickly,’" Araz said. "Some of our vehicles were sold out before they even made it to the country."
People have been flooding automotive companies’ showrooms and Web sites, said İbrahim Orhon, board member of Automotive Distributors Association. The number of showroom visitors has increased significantly since the ÖTV discount, as has the sales traffic, according to officials at Hyundai Assan. If the demand carries on at the same rate, the company expects to run out of vehicles in stock by the end of the month.According to car dealers, many customers have been paying cash for their purchases. The highest loan application received so far was for 10,000 Turkish Liras. This ÖTV discount coaxed out the money people were putting under their pillows, officials said.
Meanwhile, the activity in the auto industry may be a short lived one, as the auto enthusiast will have to face higher prices in newly produced and imported vehicles come April. Auto prices saw no increase for the past year, said Nezih Allıoğlu, general manager of Göral Plaza. The prices of the vehicles that will be pulled out of customs in April and May will reflect the foreign exchange rate, he added.
"The majority of our customers are now those who sell their secondary cars to pay their credit card debts," said DOD General Manager İlhami Eksin.
Vehicle sales have declined drastically at DOD, a Doğuş Otomotiv affiliate. The company sold nearly 3,000 vehicles in the first two months of 2008 but has sold only 2,100 vehicles in the first two months of this year.
The customer profile has also changed drastically, Eksin said. "Most of our customers have two cars, and they are looking to sell one of them or they want to switch to an older model due to economic strains. A whole lot of people are also after paying their credit card bills by selling their cars."
Private consumption tax
The Turkish government's new financial package, aimed at curbing the impacts of the global financial crisis, came into effect with its publication in the Official Gazette on March 16. The $3.2 billion package reduced private consumption tax, or ÖTV, rates in the automotive, white goods and housing sectors for three months to provide an impetus to the sluggish economy.
"Currently consumers have no interest in used cars. Things will go back to normal as the prices in the new car market settle down. We are expecting activity to pick up in the secondhand auto market as of early April," said Eksin. "Many customers are seeking economic vehicles such as Toyota and Hyundai," he added. "The biggest increase has been experienced in the number of vehicles received from fleet-rental companies."
"The re-marketing of the incoming vehicles is a quite important networking business and our efforts to sell vehicles have been more successful than originally expected," said Eksin. "Our goal is to auction 12,000 vehicles this year." Eksin also revealed DOD was seeking a foreign partner.
The government’s ÖTV discount on automotives seems to be paying off. "Sales have been declining an average of 25 percent each month since the rumors of the crisis began," said Mehmet Araz, sales manager of Neskar, the Bursa distributor of Opel and Chevrolet, but that has changed with the ÖTV discount announcement. "The industry is experiencing a major boom in sales, with a daily average of 23 to 24 vehicles," Araz said. "We have run out of some models, and it is hard to tell the company abroad to ’produce and send quickly,’" Araz said. "Some of our vehicles were sold out before they even made it to the country."
People have been flooding automotive companies’ showrooms and Web sites, said İbrahim Orhon, board member of Automotive Distributors Association. The number of showroom visitors has increased significantly since the ÖTV discount, as has the sales traffic, according to officials at Hyundai Assan. If the demand carries on at the same rate, the company expects to run out of vehicles in stock by the end of the month.According to car dealers, many customers have been paying cash for their purchases. The highest loan application received so far was for 10,000 Turkish Liras. This ÖTV discount coaxed out the money people were putting under their pillows, officials said.
Meanwhile, the activity in the auto industry may be a short lived one, as the auto enthusiast will have to face higher prices in newly produced and imported vehicles come April. Auto prices saw no increase for the past year, said Nezih Allıoğlu, general manager of Göral Plaza. The prices of the vehicles that will be pulled out of customs in April and May will reflect the foreign exchange rate, he added.