Automotive Distributors Association announced that an important study shaped on the excise duty reset was shared with the authorities.
The most important development of November for the Turkish Automotive market was undoubtedly the base update that was put into use. On the SCT side, we witnessed increases in the limits based on the prices of automobiles excluding taxes, in the focus of developments in which the discount expectations in the market remained unanswered. It is obvious that this regulation, which was put into use, did not show the expected effect on both the sector and the user side. It will not be surprising that the base update, which includes limited models and versions, loses its effect in a short time considering the price increases in the market. Making statements parallel to all these developments within the scope of a special event, Ali Haydar Bozkurt, President of the Automotive Distributors Association, emphasized the necessity of a more permanent solution. For this reason, Bozkurt touched on the issue of resetting the SCT with very clear expressions and explained that they carried out a study on long-term planning to do this.
“We expect a more sustainable solution step in the near term with a focus on tax base”
Bozkurt, who first mentioned the base update in his explanations about the process; “We can say that the explanation made in this area does not satisfy both the sector and the customer. Of course there is a reason for this. When we go to the previous year, we can see that the majority of the cars sold in Turkey are within the 45 percent SCT segment. At the point we have reached today, almost all of these cars have reached the 80 percent level. Seeing that these vehicles have regressed to the 60-70 percent range with the latest regulation has emerged as an unsatisfactory result for an industry that has been waiting for a long time.
The impact of this update is also at stake. In addition to domestic market dynamics such as the exchange rate and high inflation, we are living in periods where vehicle prices are constantly increasing in this environment where production costs increase globally. All these appear as an increase in the base prices of the vehicles day by day. Today, we can see examples where a car that is still described as luxury and some mid-segment models are taxed at the same rate. In light of all this, we expect another sustainable step to meet the expectations of the market and users in the near term.” he said.
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“Tax criteria need to be reviewed in the medium term”
Stating that they presented a three-stage planning for the SCT-free vehicle sales process, Ali Haydar Bozkurt underlines the necessity of directly reviewing and renewing the tax criteria in Turkey for medium-term-oriented expectations. Pointing out that there is a “luxury criterion” that goes beyond engine volume in new generation technologies, Bozkurt said; “The world is changing rapidly. We are in front of a product technology that goes beyond the distinction like normal under the 1,600cc engine volume, which we talked about and evaluated 30 years ago, and luxury above it. It does not seem possible for us to continue with a tax system that still works with such scales. Our medium-term expectation is to open a clean slate in this business and review the criteria. A system should have been introduced to describe new technologies. In this way, we can enable vehicles with developing technology to reach users in our country more easily. In this way, we will easily have more environmentally friendly cars.” he stated.
“We shared the SCT reset work in automobile purchases with the necessary authorities”
One of the most important messages launched today by the Automotive Distributors Association is the scenario planning in which the SCT in automobile purchases in Turkey has been abolished. Stating that they have been preparing a simulation for this for a while and made the final presentation to the relevant units, Bozkurt specifically stated that it is not possible to reset the SCT in a single item and that this can be done in gradual steps for both parties.
Bozkurt’s explanations about the study; “Of course, when we wake up tomorrow morning, we all want the excise tax to be removed from our lives. Because mobility is not a luxury, it is a necessity. The removal of SCT from our lives is not something that can happen overnight. Our suggestion here is to reduce the SCT gradually by executing the process with the right planning. In the scenario we are working on ourselves, this can happen in the range of 10-15 years. Of course, we worked on this by considering the sustainability of the country’s economy. The question of how we will create added value from this is also very important.
If we, as a country, announce to the world that we attach importance to the automotive industry and explain correctly that Turkey is a region where manufacturers can invest, everything can go to a completely different point. Europe-Middle East-Russia, we are at the heart of all this flow. We have advantages such as highway and seaway. We can say that we are very strong in terms of sub-industry and quality awareness. While we have all these advantages, matters such as volume and stability in the domestic market push the manufacturer into the background. When we look at the sales, we see that we are constantly skidding at a certain level. The basis of these are the regulations that we talked about from the first moment. For this reason, a very clear roadmap should be created and the plan should be adhered to. If you say that I will gradually reset this SCT, you should gradually reduce the rates you give each year. While the gradual nature of the process allows companies to manage possible losses, sticking to the plan will also serve as an environment of trust in order to attract big brands to Turkey. Investments to be brought to the country are a solution for the losses to be experienced on the state side of the process, as well as the reduction of the SCT.” he said.
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Possible scenarios were shared on the implementation of SCT planning
One of the important details shared by ODD within the scope of the event includes the possible reflections of the SCT’s gradual reset plan on the market. According to the plan, in which the next 10-15 year period is studied, the total market is expected to increase to 2.25 million units with the gradual decrease in SCT rates. In the study, the potential for annual automobile sales to exceed 1.5 million is also remarkable. Emphasizing that it will be possible to produce more brands/models apart from sales, the report also highlights the potential of this application to increase exports to 2 million units and revenue from 30 billion dollars to 50 billion dollars.
ODD becomes “ODMD” in the new era
Automotive Distributors Association announced the new structuring within itself for the first time at the event held today. Within the scope of the study, where we see that mobility solutions, where user experiences change all over the world, are not overlooked, it has been announced that the formation will now continue under the name of Automotive Distributors Mobility Association. With the name change, initiatives that focus on the new transportation solution created by the brands in the first stage will now be able to join the association.