Effects of the SCT Regulation on the New and Used Automobile Market

Effects of the SCT Regulation on the New and Used Automobile Market
Effects of the SCT Regulation on the New and Used Automobile Market

Evaluating the effects of the SCT regulation on the new and second-hand automobile market, 2plan Chief Executive Officer Orhan Ülgür stated that due to the high tax rate, consumers will prefer the second hand rather than zero, especially in the luxury and premium market.

Expressing his predictions and expectations about the market after the SCT regulation made at the end of August, Ülgür evaluated the current market conditions as follows:

“With the adjustment in SCT bases, there was a temporary slowdown in both the new and second-hand market for a short time. There is a pricing problem in new cars that will also be reflected in second-hand vehicles. Zero prices have suddenly become uncertain due to both the new SCT regulation and the volatile course of exchange rates, and brands are taking a little caution in setting prices in order to avoid mistakes. Brands primarily concentrated on the pricing of vehicles that they can keep within the 50 percent SCT bracket. Although we foresee that the general process will not be prolonged, we think that the uncertainties in the market will disappear within 1 week. However, with the new arrangement, there will be a serious contraction in the sale of luxury and premium models entering the upper matrix as zero. Although they have a very small share in the market, a remarkable decline seems inevitable. The consumer will not want to prefer a vehicle below the segment of the vehicle he has already used. For this reason, consumers will want to stay in their own segment, and instead of zero vehicles, they will turn to second-hand vehicles with relatively lower pricing but high-equipped and closer to zero as a model year.

Upper Segment Cancellations Over 50 Percent

Evaluating the contraction in supply and pre-order sales in response to zero vehicle demand, Ülgür added:

“The zero vehicle supply situation, which is one of the reasons for the increase in second hand prices, ended as of September. However, the behavior of the customers who print their queues at that time will be reversed due to the SCT regulation. We have previously said that customers can cancel their orders at the rate of 20-30 percent, depending on the exchange rate and the arrival price of the vehicles. The new regulation seriously affected the prices and order cancellations exceeded 50 percent, especially in the upper segments. "

Second Hand Market Will Exceed 8 Million

Orhan Ülgür's predictions about the prices and trade volume in the second-hand market in 2020 are as follows:

“In 2019, the second-hand market had a volume of 7.5 million units with repeated sales. If there is no negative situation caused by the pandemic in 2020, we anticipate that the total market will exceed 8 million units. "


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