(ECO) DEALERS FEAR LOSS OF BUSINESS IN TURKEY AS TAX CUTS END IN AUTOMOTIVE SALES.

ANKARA, Sep 30, 2009 (TUR) -- Automotive dealers in Turkey have voiced concern that their sales might see a dramatic drop as the deadline comes Thursday on a six-month temporary tax cut designed as part of an economic stimulus package by the Turkish government to tackle effects of a global recession.

"We are expecting that our business would fall by 50 percent when the tax cuts are over," Alper Gursoy, head of a local car dealers association, has said.

The Turkish government lowered in March the special consumption tax (OTV) on cars with engines of up to 1,600 cubic centimeters from 37 percent to 18 percent.

The OTV rate was increased from 18 percent to 27 percent in June and it will be 37 percent again as of October 1.

"Sales in the automotive sector were down by 35 percent even when the OTV was raised to 27 percent," Gursoy said.

The tax cuts have come in handy in boosting sales in Turkey's automotive sector, which is considered as "the driving force" of the country's economy, but was hit hard by the global economic crisis.

Sales were up by 5.9 percent in the first eight months of 2009 over the same period last year.

The number of cars sold between March and June increased by 50 percent over the same period in 2008 up to as high as 228,870.

(THROUGH ASIA PULSE)