Buying a car in some countries is almost impossible due to outrageous taxes. Turkey is one of the worst offenders, forcing some brands to put small engines in their larger models to fit into lower tax brackets. That's why Mercedes sells the latest E-Class with a 1.5-liter engine, a 1496-cc unit to be specific. The premium sedan starts at the equivalent of $63,400 or about as much as an E350 4Matic here in the United States.
However, that's before some ludicrous taxes. The Special Consumption Tax (ÖTV) for new cars with an engine smaller than a 1.6-liter displacement starts at 45 percent of the car's value as long as the price doesn't exceed a ridiculously low $5,600. The tax rate goes up incrementally depending on the car's base price, reaching 80 percent for vehicles that cost more than $8,500. Since most cars fall into the latter category, nearly all buyers must fork out an extra 80 percent of the manufacturer's asking price.
Consequently, an E-Class with the puny 1.5-liter engine and the ÖTV included is roughly $114,000. Then you add the Value Added Tax (VAT) of 20 percent and the math works out to a little over $136,000. With registration taxes included, the Mercedes E180 ends up costing approximately $137,000.
That's an absurd amount of money to pay for an E-Class that has 168 horsepower and 184 pound-feet of torque. Tipping the scales at nearly 4,000 pounds, the lowly E180 with a mild-hybrid setup takes 8.9 seconds to 62 mph and tops out at 140 mph.
As you can imagine, Mercedes isn't the only automaker resorting to downsized engines. The BMW 5 Series sold in Turkey as the 520i doesn't actually have a 2.0-liter engine like the global model. Instead, it uses a smaller 1.6-liter unit that doesn't exceed 1,600 cc to avoid falling into an even higher tax bracket. And no, it's not called the 516i, which would've made more sense.
We've only been talking about cars that have an engine that doesn't go over 1.6 liters. However, the ÖTV can be as high as 220 percent of the vehicle's starting price if there's an engine larger than 2.0 liters. You add VAT on top of that and then just give up on ever buying a new car...
