Car sales in Turkey fell 42% year-on-year in July, an automobile distributors' association said on Tuesday, as low summer buying trends were aggravated by a weaker lira and recent interest rate hikes.

The weakness of the Turkish currency, which lost as much as 25% of its value in May and June, hit importers and domestic manufacturers, whose raw materials are vulnerable to foreign exchange fluctuations, causing expectations of higher prices in July, Reuters reported.

"Consumers expected price increases in July, so some of the purchases were moved back to May and June," Morgan Stanley analyst Sayra Altuntas told the news agency, noting that Turkey imports 69% of its passenger vehicles from abroad.

Interest rate hikes, introduced to support the currency, also slowed buying in July, a month in which vehicle sales are generally lower, as 65% of Turkey's passenger vehicle sales are made with consumer credit, the report said.

"Summer time months are low anyway, and the rise in interest rates affected sales," Altuntas told Reuters.

Passenger car sales fell to 22,653 units in July from 38,967 cars during July 2005, the report added.