Will the fund crisis take its toll on the automotive sector?

The Turkish automotive sector had largely based its 2026 projections on the final quarter. Following the contraction in the second half of the year, particularly in August, campaigns and pent-up demand were expected to revitalize the market between September and December. However, as brands ramped up their year-end campaigns, a new risk emerged: the crisis in the fund market. 

At first glance, one might ask what a problem in investment funds has to do with car sales. In fact, it has much more to do with it than we might think. The real risk is that the turmoil in the fund market will erode savings, thereby weakening consumer confidence and demand for automobiles. This is because, in Turkey, cars are no longer purchased with a salary, but largely with accumulated savings.

The market was already contracting

According to data from the Automotive Distributors and Mobility Association (ODMD), the market for automobiles and light commercial vehicles reached 81 thousand 31 units in August. In the same month last year, 101 thousand 650 vehicles were sold; thus, the market contracted by 20.3 percent in one year. While total sales in the January-August period reached 719 thousand 996 units, the decline compared to the same period last year was 11.9 percent, and the decline in automobile sales alone reached 13.8 percent.

Faced with this picture, brands have begun to increase their campaigns in recent months. Discounts, low or zero-interest loans, and trade-in support have now become almost the new normal for the sector. However, the fact that the market continues to shrink while campaigns are growing indicates something important: the problem is no longer just the price of the car, but also the consumer's decreasing capacity to afford that car.

Will the problem that started in funds stay in funds?

It is precisely at this point that developments in capital markets become vital for the automotive sector. According to the statement by the Capital Markets Board (SPK), it was decided on September 17 to liquidate 131 investment funds belonging to seven portfolio management companies. The number of individual investors in these funds is 455 thousand 758. The SPK later extended the liquidation period from three months to six months. But the real issue is not just these 131 funds and the people who invested in them. The most dangerous aspect of problems in financial markets is the possibility that they will not stay where they started.

When there is a heavy outflow from a fund, assets in the portfolio must be sold to meet the cash demand of investors. When selling pressure drives stock prices down, other funds holding the same stocks in their portfolios and direct stock market investors can also be affected by the loss of value. Thus, a liquidity problem that starts in specific funds can turn into a loss of value and a crisis of confidence in a wider market. This is where the real risk for the automotive sector begins.

The red number on the screen can reach the showroom

A loss in an investor's portfolio is not just a red number in an investment account. In the economy, this has a direct equivalent reflected in consumer behavior: The wealth effect.

When the value of the financial assets people own rises, they feel economically stronger and are more willing to spend. In the opposite case, even if their income remains the same, they tend to postpone their major expenditures. This mechanism is particularly important for the Turkish automotive market; because today, very few consumers can buy a car worth 2-3 million TL solely with their monthly income. That car is often purchased with the sum of savings accumulated over years, deposits, foreign currency, gold, investment funds, stocks, and the existing car to be sold. A loan is also often added on top. Therefore, a loss of value in the financial market can directly shrink the resources the consumer has set aside for a car.

For example, for a consumer who keeps a significant portion of their savings set aside for buying a car in financial assets, after the loss of value in their portfolio, the issue is no longer a 100 thousand TL discount on the car price. What they have lost is not just money, but confidence. A consumer who does not know how much their portfolio will be worth tomorrow acts more cautiously about buying a car worth several million liras today.

Used cars are also in this chain

Moreover, it would be optimistic to think that this effect will be limited to new cars. Because a significant segment of those buying new cars in Turkey finances their new vehicle by selling their current one. The chain is actually quite simple: The consumer will sell their current car, add their savings, use a loan if necessary, and switch to a new car. When the value of savings drops, loans are expensive, or the current car cannot be sold in the desired time, a link in the chain breaks and the purchase decision is postponed.

This is exactly where the importance of what is happening in the fund market lies. If the loss of confidence in the capital market deepens, its impact may not be limited to car sales; housing, durable consumer goods, corporate investments, and general consumption trends may also be affected.

Because one of the fundamental functions of the capital market is to direct savings into investments. When the saver does not trust the system, they direct their money to stagnant areas or postpone their spending decisions due to uncertainty.

For this reason, seeing what is happening in the funds only as a problem for hundreds of thousands of investors would be an incomplete reading. The real question is whether these events will change the behavior of millions of savers in Turkey. The automotive market is a candidate to be one of the first areas where this can be seen.

The calculation for the final quarter has changed

The automotive sector is now entering a difficult final quarter. Brands can;

• Lower prices,

• Offer zero-interest loans,

• Increase trade-in support,

• Announce campaign after campaign.

But there is one thing they cannot do: Replace the wealth and confidence the consumer has lost.

For this reason, the bill for the turmoil that started in the fund market may not remain only in investment accounts. A part of that bill may appear in car showrooms, a part in housing sales, and a part in postponed general consumption. 

A few years ago, consumers in Turkey were bringing forward their car purchase decisions out of fear that “it will be more expensive tomorrow.” Today, the same consumer may prefer to wait out of concern that “how much will my money be worth tomorrow?”

This is where the real risk of the final quarter lies.

It is not that the car is more expensive, but that the consumer who can afford to buy it feels poorer.