Will prices for second-hand cars fall? Honda Turkey executive explains

Honda Turkey Senior Assistant General Manager Bülent Kılıçer made assessments regarding the current situation in the automotive market.

According to the report in Dünya; Kılıçer stated that the automotive market would push the 1 million level this year, but noted that it might remain slightly below that figure.

Kılıçer continued as follows: "But in the coming periods, where we go depends heavily on 3-4 issues. One, where will exchange rates go? Two, where will the credit availability rate go? Third, will we experience a new supply shock? Will there be new variants? Of course, where prices will go and the credit part are very, very important."

"SOLD BASED ON NEED"

Pointing out that automotive purchases for investment purposes have come to an end, Kılıçer said, "Automotive has definitely, absolutely ceased to be an investment vehicle for the last 2-3 months. It is being sold entirely based on need. Along with this, it must be said that the frequency of changing vehicles in the previous period, which may vary from brand to brand in Turkey, is on average between 3.5-4 years. At this point, the duration has started to gradually extend. That is, it has started to rise to 5 years, 5.5 years."

"THOSE WAITING ARE GIVING UP"

Reporting that there have been order cancellations for some models, Kılıçer noted that there are those who have been waiting for a long time in the current situation or who wanted to buy as an investment vehicle but have given up on purchasing under current conditions, and that there are also various campaigns.

PRAISE FOR THE CENTRAL BANK

Evaluating the steps taken by the Central Bank of the Republic of Turkey, Kılıçer stated that very serious efforts are being made to make the coming period a little more predictable with the steps taken.

Expressing that this has started to happen gradually, Kılıçer continued his speech:

"So when you look at it today, exchange rates have now settled into a stable place. At least we have become able to estimate more or less what the next step will be and its effects. This positively affects the predictability part, whether in the housing market or the automotive sector. In this sense, I see these steps very positively. In the coming period, the market will remain slightly below 1 million, but when we compare it with previous periods, it will actually have subsidized the amount we remained below what should have been during that pandemic period."

POINTED TO 'NORMALIZATION'

Stating that they expect the campaigns they have launched to continue in the coming period, Kılıçer said, "I think that in the period after this, at least until the end of the year, and even if we consider that exchange rates and inflation are more or less at these levels, this campaign period, or in quotation marks 'normalization', will continue in 2024 and even in 2025."

DECLINE IN SECOND-HAND MARKET MAY CONTINUE

Bülent Kılıçer pointed out that the discount and campaign period for new vehicles will also affect the second-hand market and cause prices to fall.

Noting that the era of selling second-hand vehicles above their new price is now over, Kılıçer concluded his words as follows:

"With the current campaigns and the slight decline in demand, we have seen that second-hand prices have also fallen significantly. In the process ahead, I think this situation will continue a little longer in this sense. Especially if we expect these campaigns to continue and even deepen towards the end of the year and including the beginning of 2024, I think the decline here may also occur in the coming process."