(Adds details, quotes)
By Ercan Gurses
ANKARA Nov 25 Turkey increased its special
consumption tax on cars on Friday, a move that will be applied
to all but the cheapest models in what the finance minister said
was a response to demands from the industry.
Speaking to reporters in Ankara, Naci Agbal said that no
increases would be applied to cars that cost less than 40,000
lira ($11,578). Models costing 40,000-70,000 lira would see a
price rise of around 3 percent, he said.
The change, which Agbal said would contribute around an
additional 3 billion lira to the budget, is seen as potentially
positive for sales of mass-market cars made in Turkey as it
would drive up the cost of luxury competitors, many of which are
"The goal is not to obtain revenue, it is to amend the
system's broken structure and move to a just and new taxation
system," Agbal said.
Under the current system, imported luxury cars with smaller
engines are in the same tax bracket as mass-market models, many
of them made in Turkey by firms including Toyota and
Renault, or Ford Otosan and Tofas
, local joint ventures with Ford and Fiat.
The new system will make even smaller-engine luxury cars
The changes will not be welcomed by car importers including
Dogus Automotive, which sells brands including
Volkswagen, Audi and Bentley in Turkey.
"New taxes for higher-priced cars are negative for premium
car sales and Dogus could take a hit," Oyak Securities said in
an e-mailed note.
"For Ford Otosan and Tofas, the negative impact would be
softer as passenger car domestic sales have a smaller share in
their total sales and light commercial vehicle tax rates will
stay unchanged," it said.
Ford Otosan and Tofas both export models produced in Turkey
as well as supplying the domestic market.
($1 = 3.4546 liras)
(Additional reporting by Nevzat Devranoglu and Orhan Coskun;
Writing by Nick Tattersall; Editing by David Dolan)