Automotive Sector

Limited 0.6% fall in sales momentum in June

June Light Vehicle (LV) sales came in at 74096 units according to Automotive Distributors’ Association (ODD) figures, slightly higher than the street estimate of 70,000 units. June figure corresponds to a y/y increase of 4.3% and a m/m fall of 9%. June auto sales, when seasonally adjusted, corresponds to a fall of only 0.6% compared to the previous month. Looking into the segments; passenger car (PC) segment registered a 14.6% y/y growth while Light Commercial Vehicle (LCV) sales registered a 21.8% fall. LCV sales have been weak  year-to-date due to slow economic growth, tax hikes and stricter regulations for these type of vehicles; which is negative news for LCV producers Ford Otosan and Tofas. On a cumulative basis, LV sales are up 12.1% y/y in 1H13, with PCs registering 19.5% growth and LCVs registering 6.8% fall.

 

BIST-listed players lost market share in June

Ford Otosan, Tofas and Dogus Otomotiv lost market share to the other players in June. Tofas’ LV market share fell by 148bps to 12.7% with losses both in the PC and LCV segment. Ford Otosan’s market share fell by  102bps to 12.6% with 174bps market share loss in the PC segment. On the other hand, Ford Otosan increased its LCV market share by 301bps in June possibly fuelling campaigns in the month. With market share losses in the PC segment, Dogus Otomotiv’s LV market share retreated by 39bps to 16.7%.

 

We expect to see some weakening in sales volumes of the sector

Auto sales have been strong in 1H13 with 12% y/y increase due to strong consumer confidence, falling auto loan rates, strong Lira against fx basket, new model year practice and campaigns of the manufacturers. June figure was also strong (on surging PC sales) despite volatility in the markets following the street protests. However; we think this strength was partly related to customers’ rush to buy cars before the price increases are applied following the depreciation in the Lira. Looking forward, we expect to see some loss of sales momentum with weaker consumer confidence, increase in price tags of cars and some increase in auto loan rates. Additionally; Ramadan  starts early July this year, which implies that we may see weak sales figures in the coming month. Currently, we forecast the LV market at 840k units for whole year 2013, corresponding to an 8% increase compared to 2012.