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Turkish autos: Sales volume increased by 70% y/y in May, continues to soften m/m

  • Turkish Light Vehicle (LV) sales increased by 70% y/y to 54.7K units in May 2021, lower than our estimate of 70.9K units
  • P. Cars increased by 72% y/y to 43.1K units and LCV sales boosted by 62% y/y to 11.6K units in May
  • We foresee 2021E LV sales to increase by 13% y/y to 877K units. 

Turkish Light Vehicle (LV) sales increased by 70% y/y to 54.7K units in May 2021, lower than our estimate of 70.9K units at the beginning of the month. On a segmental basis, P. Cars increased by 72% y/y to 43.1K units and LCV sales boosted by 62% y/y to 11.6K units in May 2021. Continuation of increase in e-commerce activity might continue to support the strong momentum in LCV sales. We foresee 2021E LV sales to increase by 13% y/y to 877K units. 

Despite pandemic concerns and steep TL depreciation, Turkish auto sales were strong in 2020 supported by pent-up demand as well as lower interest rates.  We also had a very strong year until Mar’ 2021. In 1Q21, due to low base year, ongoing campaigns, accelerated growth in e-commerce, consumer’s price increase expectation and global chip concern related availability problem pulled back domestic LV demand. Domestic market still looks strong y/y but we see some softening in demand in April and May after a historic high March sales volumes achieved. In 2021, we believe that consumer sentiment will continue to be supportive but higher interest rates will mitigate this positive impact. Between 2010-2019 on average 35.5% of yearly LV sales volume was completed in first 5-months  of the year. Assuming the trend continues in 2021E, we calculate 892.3K LV sales volume which is 1.7% higher than our base scenario estimate of 877K units.  For the rest of the year, June will give us more hints about the effect of higher interest rates and  TL depreciation.

In our optimistic-case scenario, we expect 22% y/y increase to 944K units in 2021E assuming better economic conditions, especially the potential decline in FX rates, better financing availability and re-initiation of SCT incentives. In our pessimistic-case scenario, we assume 3% y/y growth in LV market to 799K units assuming that consumer sentiment deteriorates further, triggered by further pressure on TL and worsening in financing availability due to higher interest rates.

Within our auto coverage, we continue to favour Tofas due to higher rewards versus potential risks at current levels. In May 2021, Tofas was the highest market share gainer (+422bps m/m to 18.7%) followed by Peugeot (+164bps m/m to 5.6%) whereas Ford Otosan (-76bps m/m to 8.2%) was the major market share loser followed by Hyundai (-58bps m/m to 4.3%) during the same period. In our coverage Ford Otosan has lost market share (-76bps m/m to 8.2%) whereas Tofas and Dogus Otomotiv gained market share (+422bps m/m to 18.7% and +47bps m/m to 19.1% respectively). In May, 2021 Dogus Otomotiv continues to be the market leader followed by Tofas.


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