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Overview of Israel’s Automobile Market in 2021

In 2021, automobile sales in Israel increased by 35.3% year-on-year to 306,012 units, reaching an historic high level. Passenger vehicle sales went up 34.7% to 272,646 units while commercial vehicles rose 40.5% to 33,366 units. Hyundai maintained the top position in the Israeli automobile market for the sixth consecutive year, but its market share decreased by 0.8 pp year-on-year to 14.1%.

Israel: Recent Developments

Market Trends

・Automobile sales in 2021 increased by 35.3% year- on-year to 306,012 units, exceeding 2016’s record high level of 302,498 units. - Looking at results by brand, Hyundai increased by 28.3% year-on-year to 43,152 units, maintaining the top position for the sixth consecutive year, but its market share decreased by 0.8 pp year-on-year to 14.1%. Toyota ranked second 40,844 units, up 42.0% year-on-year, followed by Kia with 39,737 units, up 55.9% year-on-year. - Among small electric vehicles, BEVs increased 8.0 times to 11,000 units, PHEVs went up by 1.4 times to 12,000 units, and HEVs (excluding MHEVs) rose 28.4% to 48,000 units. - The top model was the Toyota Corolla for the third consecutive year, going up 37.6% year-on-year to 17,000 units.

Policy Trends

・In Israel, the purchase tax on BEVs has been kept at 10%, but will be raised to 20% in 2023 and 35% in 2024. - Israel will ban the sale of new internal combustion engine vehicles by 2030.

Trade Trends

・In April 2022, Israel and the United Arab Emirates agreed to conclude an FTA. It will enter into force after ratification procedures in both countries. - This is the first time Israel has signed an FTA with an Arab country. ・In May 2021, Israel and South Korea signed an FTA. On an import value basis, Israel eliminated tariffs on 100% of items and South Korea on 99.9%. - As a result, the 7% tariff on passenger cars imported from South Korea was reduced to zero, which is expected to increase market competitiveness.

Economic Trends

・According to the announcement by the Central Bank of Israel in February 2022, the GDP growth rate in 2021 was 8.1%, and the forecast for 2022 is 5.5%. - However, the announcement was made before the Russian invasion of Ukraine.
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