Turkey wants to impose additional taxes on every car from China in the future.

As announced by the Ministry of Commerce in Ankara, tariffs of 40% or at least US$7,000 per vehicle will be imposed.

. In doing so, it extends the special tax it had introduced a year ago on Chinese electric cars. From July 8, taxes on imported cars from China may rise to 50%.

Many representatives of the car industry are very concerned about this issue. And this is because the domestic market is already unstable and inflation in recent years is anyway very high. And there are fears that additional tariffs will push prices up even further.

A worker in Turkey with an average income can anyway with great difficulty afford to buy a car. The minimum wage is currently at 485 euros, with annual inflation running at 75.45%. And according to the DISK union almost half of all workers in the country receive the minimum wage.

Price increase in European cars too?

It is for this reason that Aydin Erkots, president of the Association of Automobile Dealers (MASFED), considers the additional duty on Chinese vehicles to be an interference with the free market. “If the tax increases, it should apply to all brands,” he says in an interview with Deutsche Welle. Like many others, he fears that European manufacturers will now raise their prices. So far, they have kept a low profile due to cheap competition. In the future, all cars will be more expensive. “There is another reason why new cars are becoming more expensive in Turkey,” says Ali Karakas, CEO of used car sales platform otomerkezi.net. In July, a package of EU adaptation measures on so-called “safe driving” is implemented. These are driver assistance systems such as automatic emergency braking, driver drowsiness warning systems, alcohol immobilizers and the like, which will now be mandatory for new vehicles.

As a result of this and the additional tariffs on Chinese cars, Caracas estimates that prices in the car market could rise by around 45%. At the same time, he hopes that this could possibly revive the stagnant used car market. “Cheap cars of Chinese origin have so far had the biggest negative impact on the used car market. Many consumers have preferred new Chinese models to European used cars,” Karakas points out. Rising prices could now benefit the used car market. Dealers president Erkots is less sanguine, because he says sales in the used car market have fallen by as much as 70% in the last year or so. In his opinion, the reduction will continue for at least six months. “As long as inflation and interest rates don’t fall, the auto market will continue to stagnate.” So far Chinese brands are becoming more and more popular among Turks. Ten of them penetrate the Turkish market with a market share of 10%.

Chinese cars made in Turkey

The reaction of the Chinese Ministry of Commerce to the additional tariffs was strong. In a statement he emphatically rejected the additional taxes and demanded the abolition of tariffs that create a “discriminatory regime”. On the one hand, Turkey wants to use special taxes to protect its own car brands, such as TOGG. On the other hand, it aims to encourage the Chinese to invest in Turkey, which has not happened until now. And this calculation seems to be paying off. Chery is the most popular Chinese brand in Turkey. Its head in Turkey Xi Fengguo said it is making efforts to start production in Turkey as soon as possible. Kagan Dagtekin, managing director of Dogan Trend Otomotiv, the Turkish distribution partner of the MG brand, expressed a similar view. “We are trying to create the first European production unit in Turkey.”

Hismetin Yalcin is the CEO of Cardata, a company that provides data services to the Turkish automotive sector. He appears cautious in his assessments and waits to see the facts first. “After the decision on additional tariffs, we have heard that some Chinese manufacturers want to invest in Turkey. However, it remains to be seen whether these announcements will materialize.” According to the latest figures from the Association of Automotive and Mobility Distributors (ODMD), total sales in the Turkish car market increased by 6% to 471,473 units between January and May compared to the same period last year. But sales of electric cars increased by 257.3%, while the number of hybrid cars increased by 50.3%. This increase was mainly at the expense of diesels. Only one in ten cars are now diesel-powered. Gasoline vehicles generally maintained their share of the overall market at 66%.

Editor: Irini Anastasopoulou