Turkey automotive market contraction reduces tax revenue

Turkey's automotive market experienced a significant contraction in the first eight months of 2026, with total sales falling by 11.91% to approximately 719,996 units. This decline has directly impacted government revenues; Special Consumption Tax (ÖTV) collections dropped by 8.12% in August to 60.3 billion TL, following a 2.55% decrease in July. While the average tax collected per vehicle rose from 626,000 TL in August 2025 to 718,000 TL in August 2026, the shrinking sales volume has offset these gains.

Regarding tax exemptions, vehicles eligible for ÖTV relief must meet a price limit of 2,873,900 TL and possess at least a 40% domestic production rate. Eligible models include various versions from brands such as Togg, Toyota, Renault, Hyundai, and Fiat.

In the electric vehicle sector, a comparison between new and used markets shows that second-hand electric cars are, on average, 20.3% cheaper than new models. Market dynamics are heavily influenced by tax brackets, with manufacturers often strategizing to keep models within the 25% ÖTV bracket. Approximately 90% of electric vehicles sold in the first eight months of 2026 had a power output of 160 kW or less.