New Delhi, Nov. 12, 2024 (GLOBE NEWSWIRE) -- Israel automotive retail market is projected to hit the market valuation of US$ 31.94 Billion by 2032 from US$ 8.57 billion in 2023 and at a CAGR of 15.74% during the forecast period 2024–2032.
As Israel's automotive market progresses in 2023, it presents significant opportunities driven by technological innovation and changing consumer preferences. The surging demand for electric vehicles (EVs), with sales surpassing 48,921 in 2023, offers considerable growth potential. Government incentives, reducing EV costs by up to 50,000 shekels, and an allocation of 500 million shekels for infrastructure development, bolster this opportunity. The economy's strength, highlighted by a GDP per capita exceeding $58,000, enhances consumer purchasing power, fueling market expansion for both standard and luxury vehicles.
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Current trends in the automotive retail market focus on integrating advanced technologies into vehicles. Over 50 new car models featuring advanced driver-assistance systems (ADAS) were launched in 2023. Israel's tech sector, employing over 300,000 professionals, plays a crucial role, with companies like Mobileye pioneering autonomous driving technologies. Collaboration between automakers and tech firms positions Israel not only as a consumer market but also as an innovation hub in automotive technology.
Emerging demand patterns show a shift toward mobility-as-a-service models. Car-sharing services, such as those offered by Car2Go with a fleet of over 1,000 vehicles, are gaining popularity, especially among the urban population that comprises 75% of the country's 9.3 million residents. The rental car industry thrives alongside, supported by over 4 million tourists visiting annually. These trends indicate a diverse and evolving market, offering various opportunities for stakeholders.
Key Findings in Israel Automotive Retail Market
| Market Forecast (2032) | US$ 31.94 billion |
| CAGR | 15.74% |
| By Service Type | Dealership (88.17%) |
| By Coverage | New Cars (58.85%) |
| By End Users | Individual (83.81%) |
| Top Drivers |
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| Top Trends |
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| Top Challenges |
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Dealerships Reign Supreme: Unpacking Their Dominance in Israel's Automotive Retail Market
The dealership segment was leading Israel's market, a trend likely continuing in the years to come as the segment held more than 88.17% market share. Israeli consumers have traditionally favored the tangible experience offered by physical dealerships. The opportunity to physically inspect vehicles, take test drives, and engage directly with knowledgeable sales representatives instills confidence and trust in the purchasing process. This preference is evidenced by the substantial number of new vehicle registrations, which reached approximately 254,000 units in 2019, predominantly facilitated through dealerships.
Dealerships in Israel have solidified their superiority over online retail by offering comprehensive services that extend beyond mere vehicle sales. They provide tailored financing options, enabling customers to secure loans or leasing agreements conveniently. Additionally, dealerships in the automotive retail market offer trade-in services, maintenance packages, and after-sales support, creating a one-stop-shop experience for consumers. For instance, major dealership networks like Delek Motors and Mayer's Cars and Trucks have invested heavily in customer service and facilities, contributing to higher customer satisfaction rates. The extensive network of over 400 authorized dealerships across the country ensures accessibility and personalized service for a wide customer base.
Regulatory factors also play a significant role in maintaining dealership dominance. Stringent laws governing vehicle imports and sales favor established dealerships, which have the resources and compliance frameworks to navigate complex regulations. The Israeli government's taxation policies on vehicle purchases, such as the purchase tax which can reach up to 83% depending on the vehicle's environmental rating, are often more efficiently managed by dealerships that can offer financial incentives or absorb certain costs. While online vehicle sales have been on the rise globally, in Israel, they accounted for a modest estimated figure of around 5,000 units sold online in 2020. Cultural preferences for face-to-face transactions, coupled with the comprehensive services and regulatory advantages of dealerships, have solidified their leading position in Israel's automotive retail market.
New Cars Lead the Way: Exploring Israel's Booming Automotive Sales
The new cars segment has been at the forefront of Israel's automotive retail market, significantly outpacing sales of used cars, spare parts, and financial services. In 2020, Israel witnessed a strong performance in new car sales, with approximately 270,000 new vehicle registrations, highlighting a robust demand for new vehicles over used ones. This preference is driven by several key factors, including technological advancements, environmental considerations, and consumer aspirations for the latest models equipped with cutting-edge features.
The higher revenue generation from new car sales compared to other segments is attributed to the greater profit margins and higher transaction values associated with new vehicles. Consumers in Israel are increasingly prioritizing vehicles with advanced safety features, fuel efficiency, and lower emissions, aligning with global trends towards sustainability. The Israeli government's incentives for electric and hybrid vehicles, such as reduced purchase taxes (10% for electric vehicles as opposed to up to 83% for gasoline vehicles), have boosted new car sales, particularly in the eco-friendly segment. For example, sales of electric vehicles saw a significant increase, with thousands of units sold by brands like Tesla, which entered the Israeli automotive retail market in early 2021.
The dominance of the new car segment is also propelled by the continuous introduction of attractive financing options by dealerships and financial institutions, making new cars more accessible to a broader consumer base. Manufacturers and dealerships often offer competitive loan terms, leases, and trade-in programs, encouraging consumers to opt for new vehicles. Looking ahead, the future of Israel's automotive market appears geared towards sustained growth in the new car segment, especially with the anticipated rise in electric vehicle adoption. The government's commitment to reducing carbon emissions and initiatives to expand charging infrastructure are expected to further drive new car sales. While exact figures for 2023 are not available, these ongoing developments suggest that the new car segment will continue to lead Israel's automotive retail market.
Individuals Drive Demand: Understanding Consumer Preferences in Israel's Automotive Market
Individual consumers are the largest buyers in Israel's automotive retail market with 83% market share, outpacing fleet operators significantly. This trend is influenced by Israel's relatively small geographical size and the high rate of private car ownership. As of 2019, there were over 3.5 million registered vehicles in Israel, serving a population of approximately 9 million people, indicating a high vehicle-to-population ratio. Personal vehicles are considered essential by many Israelis for daily commuting, given the limitations of public transportation in certain areas.
Fleet operators, while present, are deterred from large-scale purchases due to high vehicle taxes and operational costs. The Israeli government's purchase tax and annual licensing fees increase the total cost of vehicle ownership, making large fleet investments less economically attractive. Additionally, the rise of alternative mobility solutions, such as ride-sharing services and improved public transportation initiatives in urban areas, reduces the necessity for companies to maintain large fleets. For example, initiatives like the light rail systems in cities like Tel Aviv aim to provide efficient public transit options, potentially diminishing the reliance on corporate vehicle fleets.
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Top 4 Players Take Up More than 50% Market Share in Israel Automotive Retail Market
Currently, Delek Automotive Systems Ltd, CARASSO MOTORS LTD, Automax Motors Ltd, and Lexus are top 4 players in Israel market. These 4 players collectively holding over 50% market share. Delek Automotive Systems Ltd. and Carasso Motors Ltd. are 2 most prominent players in Israel's automotive retail market. Their leadership positions are attributed to a combination of exclusive distribution rights, extensive dealership networks, and strong brand portfolios. Delek Automotive has been successful in importing and distributing major car brands, which enhances its market presence. Similarly, Carasso Motors, as an importer and distributor of leading automotive brands, has established a robust market share through strategic partnerships and customer-centric services.
The concentration of market share among these 4 top players is largely due to their ability to secure exclusive agreements with global automotive manufacturers. This exclusivity reduces competition within certain market segments, allowing these companies to command significant portions of the market. Their extensive dealership networks across the country make their products more accessible to consumers, further solidifying their market positions. Additionally, investments in marketing, after-sales services, and customer loyalty programs contribute to sustained customer engagement and repeat business.
On the other hand, Lexus, being the luxury vehicle division of Toyota, operates in the premium segment in the automotive retail market and have a significant presence within that niche market. Automax Motors Ltd.'s market influence would depend on factors such as the brands they represent, their dealership network, and customer service quality. The overall market reality is that a few key players dominate due to strategic alliances, brand exclusivity, and comprehensive service offerings, which enable them to capture and maintain substantial market shares in Israel's automotive retail sector.
Israel Automotive Retail Market Key Players
- Delek Automotive Systems Ltd
- CARASSO MOTORS LTD
- Automax Motors Ltd
- Lexus
- Other Prominent Players
Key Segmentation:
By Service Type
- Dealership
- Online Retail
By Coverage
- New Car
- Used Car
- Service & Parts
- Finance & Insurance
By End User
- Individual
- Fleet Operator
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