Many Turkish consumers invested in gold and foreign currencies are choosing to cash in their recent profits due to high exchange rates and gold prices by purchasing foreign cars, resulting in significantly increased vehicle sales in August, a top Toyota executive told Today's Zaman on Monday. 

The rise in the value of the dollar and the euro against the Turkish lira, due to a competitive devaluation policy enacted by the Turkish central bank to curb short-term hot money inflows into Turkey and to create more competitive export prices in case of a global financial crisis, has hit the auto market hard. Also, due to fears that the global economy may face a second crisis like that of 2008, many investors have chosen to invest in the perennial safe-haven, gold, which is seeing record-high prices right now. The euro has risen nearly 20 percent against the lira since the beginning of this year, while the lira depreciated almost 13 percent against the dollar in the same period. Since many cars have foreign price tags, it is to be expected that a rise in the value of foreign currencies will be reflected in Turkish auto prices. Accordingly, many companies raised prices by approximately 10 percent in August, resulting in a steep drop-off in sales reports Today's Zaman.

“We did see an increase in customer traffic leading up to the Ramadan Bayram,” Ali Haydar Bozkurt, CEO of Toyota's sales and marketing in Turkey told Today's Zaman. “Many people with savings in foreign currencies and gold are cashing in their profits with car purchases. Customers who feel they have earned enough thanks to those currencies' [the dollar and euro] rise against the lira and the recent hike in gold prices are deciding to realize their profits by buying new cars. There were occasions in August when we sold 130 new cars in one day.” Bozkurt noted that despite the fact that the euro is up against the lira by 20 percent, Toyota only increased their prices by 2-3 percent in August, but added that if exchange rates remain this high, a further price hike will be inevitable in the coming months.