One and a half years after the Japanese launch of the Honda CR-Z, the world’s first manual hybrid, it has come to Turkey, where high fuel prices could create a strong market for the automobile — if the price is right.
Next time you find yourself complaining about high gas prices, consider this: Turks currently pay nearly $12 per gallon of petroleum at the pump. Despite this, hybrids haven’t found much of a market in Turkey until now, largely because they’re sold for far higher prices in Turkey than in most European countries. While the government has expressed its desire to wean itself off the foreign resources that comprise 80 percent of its primary energy supply, its efforts to do so have been half-hearted.
The release of the CR-Z, however, has the potential to actually reduce Turkish fuel consumption.
Hybrids in Turkey: what’s the current picture?
Honda’s CR-Z will be available in Turkey at a starting price of around $30,000. At 35 miles per gallon (mpg) in the city and 39 mpg on the highway, its fuel economy isn’t quite as strong as that of automatic hybrids on the market. But the price of the vehicle itself could allow it to succeed in the Turkish market, where other hybrids have not.
The Toyota Prius, the world’s most high-profile hybrid automobile, is available in Turkey, but it costs about $50,000 — nearly one and a half times as much as it does in the Netherlands or the United Kingdom.
This is tied to the high price of gas in Turkey. Both cars and liquid petroleum are double-taxed in Turkey. Consumers must pay both a sector-specific value-added tax and something called a “special consumption tax” — a type of tax the government introduced in 2002 to specifically target imported products such as alcohol, tobacco, and petrol.
So far, the special consumption tax also applies to vehicles that run on petroleum, which is why the Prius costs so much more in Turkey than in other countries.
How to boost demand for hybrids? Lower their prices.
The special consumption tax has been very good to the oil distribution sector in Turkey, whose companies have seen their profit margins nearly double in the past several years.
Among clean car manufacturers with operations in Turkey, it’s widely acknowledged that the tax must be eliminated or sharply reduced on hybrids to make them economically feasible in the country. The Turkish government has acknowledged the need for a cleaner energy economy, and expressed its desire to introduce tax incentives that could bring Turkey in line with European Union environmental tax criteria.
But in the most recent government strategy document on the subject, no concrete goals are set on this matter.
Until the government offers material support, hybrids in Turkey will only attract significant consumer interest when they come at a price that is competitive with conventional vehicles. Time will tell whether the CR-Z’s price is low enough.
Almost 34,000 CR-Zs have been sold around the world since Honda introduced the car in 2010. At least 60 are expected to be sold in Turkey over the next three months.
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