How will the disposition of the tax base on the car affect prices?

When the announcement that the tax base arrangement will be made in cars starting next month paralyzed transactions in the sector and blocked the market, the regulation was brought forward.

The tax base arrangement, which was scheduled to be announced on December 1, was put into practice with its publication in the Official Gazette today.

Accordingly, the base for the 45 percent SCT for automobiles was increased from 120,000 lira to 184,000 lira, while the base for the 50 percent SCT was increased from 150,000 lira to 220,000 lira.

While the baseline for the 60 percent SCT rate increased from 175,000 lira to 250,000 lira, the baseline for the 70 percent SCT rate went from 200,000 lira to 280,000 lira.

Stating that with the regulation there will be a limited discount between 5 and 16 percent on the prices of new vehicles, which have increased at least between 60 and 90 percent since the beginning of the year, the representatives of the sector explained that the regulation did not comply The expectations.

The used car price discount is expected to be further limited to 5-10 percent.

Another concern is that, due to inflation and rising production costs, the effect of even this inadequate regulation will be short-lived.

ODD: EXCEPT FOR SOME MODELS, THERE IS NO LOW TAX PERIOD

Speaking to Sozcu.com.tr, the president of the Association of Automotive Dealers (ODD), Ali Haydar Bozkurt, said that bringing forward the regulation to be made on December 1 was a good decision, but stressed that it did not meet expectations. of the industry.

He said that a few days ago, customers were on hold and sales were stagnant due to rumors of base updates coming on December 1st, so it was ‘a good decision’ to do the base update earlier. .

However, Bozkurt said that almost all models have been in the higher 80 percent SCT zone for a long time.

“Based on today’s assessment update, it is seen that there are no vehicles that fall into the lower tax bracket, except for a few models,” Bozkurt said.

‘A VERY LIMITED DISCOUNT’

Speaking to Sozcu.com.tr, Arabam.com Deputy General Director of Marketing Dr. Naim Çetintürk, on the other hand, explained that after the regulation, there was a retracement in the range of 5 to 16 percent in prices for new vehicles, corresponding to a reduction in the range of TL 30,000 to TL 70,000 in total, saying:

“This is certainly a pro-consumer development in a period of economic downturn, but it is quite limited in an environment of 85 percent official inflation.

Before today’s base change, there were 5 different segments like 45 percent, 50 percent, 60 percent, 70 percent, and 80 percent, but almost all vehicles had to enter the 80 percent segment except one or two vehicles. Therefore, the SCT application was unable to perform its function.

The regulation allowed vehicles to be distributed in a more precise SCT segment.

However, if the SCT’s lower rate segments included more vehicles, a more significant overall price advantage would have been created. In this sense, it did not meet expectations.”

‘THE MOST SUITABLE VEHICLE’ ON THE MARKET IS REDUCED TO 285 Thousand TL

Çetintürk predicted that this volatility in new car prices will also be reflected in second-hand prices, albeit slowly, but that the decline in second-hand prices may remain in the range of 5-10 percent, being even more limited.

According to the information provided by Çetintürk, a new vehicle, which cost 180,000 TL before the regulation, was in the 60% SCT segment and the sales price reached approximately 350,000 TL. It is currently in the 45th percentile and the sale price is 315 thousand TL. In other words, there is a withdrawal of 30-35 thousand lira.

Noting that a vehicle worth 220,000 lira entered the 80 percent SCT zone before the regulation, Dr. Çetintürk said, “The selling price of this was 470,000 lira, but now it has decreased to 390 thousand lire. That is, there is a withdrawal of 70,000 lire, ”he said.

Çetintürk also said: “With the regulation, the most suitable vehicle on the market decreased from 330 thousand TL to 285 thousand TL. That is, there is a limited discount of 13.6 percent, ”he said.

‘INFLATION IS HIGH, IT LASTS SHORT’

Although the price reduction created by the regulation is limited, there are concerns that even this may be short-lived. The reason is that due to high inflation and the continuous increase in production costs, the prices of vehicles will increase again and go up to high segments of SCT…

Speaking to Sozcu.com.tr, Otomerkezi.net CEO Muhammed Ali Karakaş is among those who think that the effects of the regulation will be temporary.

Unfortunately, this will be a temporary decision. We will not be able to say that it will create a permanent pricing policy effect,” Karakaş said.

Noting that beyond the current price decline, the most important issue is “the ability to keep the base rates regularly updated”, Dr. Çetintürk, on the other hand, had this to say about what needs to be done:

‘SHOULD CONTINUE TO BE UPDATED DEPENDING ON PRODUCTION COSTS’

“Base rates must be updated according to production prices and market realities.

If this doesn’t happen, it will continue to slide higher when the factory prices of these vehicles rise again due to high inflation and rising production costs. At that point, not much will have changed in our lifetimes, and we’ll still be buying a lot of vehicles in the top 80 percent of taxes.

So it bears repeating: base rates need to be updated according to producer prices and market realities.”

‘ANOTHER ARRANGEMENT MAY COME BEFORE THE ELECTIONS’

Another person who spoke to Sozcu.com.tr, a tax expert and faculty member at the Ondokuz Mayis University Faculty of Law, Assoc. Dr. According to the information provided by Murat Batı, a new vehicle, which cost 560 thousand lira until yesterday, fell back to 530 thousand TL with a 5 percent discount after the regulation; A vehicle with a value of 400 thousand TL decreased by 16 percent to 334 thousand TL.

According to Batı, who says that today’s regulation will not make any difference for vehicles with a selling price of TL 595,000 or more, another regulation can be made before the elections.