What embargo? Turkish-made cars still arriving in Israel

In early May, the Turkish government imposed a ban on exports to Israel, including vehicles manufactured in Turkey. But recent figures suggest that the ban is ineffective.

According to Transportation Ministry figures released this week, 2,847 private and commercial vehicles manufactured in Turkey were delivered to Israel between May and June 2024, at an estimated value of NIS 250 million (based on the announced price). Most of these vehicles were imported before the ban began, but it appears that imports have not stopped completely.

This week, Turkish media reported a sharp and unexplained increase in Turkish exports to Greece in May, reaching $150 million. Some in Turkey see the increase as a trade channel that circumvents the embargo, from Turkey to Greece and then to Israel. The goods in question include motor vehicles. The Turkish investigation found that goods destined for Israel were being exported from Turkey to other countries with documents stating that the final destination was a third country, and from there they were being re-exported with new documents.

According to the Central Statistical Office’s May figures, imports of vehicles and vehicle parts from Turkey fell sharply to $14.2 million from $40.2 million in May 2023. However, some of the missing imports are expected to show up in the June figures, which have not yet been published, or have been diverted through other countries, whose names are on the bills of lading.

Chinese vehicle deliveries rise

The indifference of the domestic vehicle market to geopolitical developments in the wake of the Iron Swords War does not appear to apply only to Turkey. According to vehicle delivery figures, deliveries of Chinese-made vehicles in the first half of this year were 16.8% higher than in the first half of 2023. Vehicles made in China accounted for 22.3% of total vehicle deliveries in Israel, the highest share of any Western country. For comparison, the market share of Chinese vehicles in the European Union was less than 4.5% in the January-May period.

In Israel’s electric vehicle sector, Chinese brands accounted for 65% of total deliveries in the first half of the year, again the highest share among developed countries. This month, China published figures on Chinese electric vehicle exports to the EU. Sales of some Chinese brands in Israel are tens and even hundreds of percentage points higher than those of all EU countries combined.

The peak of “self-registration”

In total, 155,000 new vehicles were delivered in Israel in the first half of this year, 11% less than in the same period last year. Industry estimates indicate that in June, when 26,000 vehicles were delivered, 5% more than in June last year, more than 4,000 of the vehicles delivered were “self-registered,” meaning vehicles that importers were forced to register in their name after failing to sell them within a year of their manufacture, plus a three-month extension due to the war. These are record numbers for self-registration, which has led to a significant increase in the supply of vehicles on the “zero kilometer” route, meaning vehicles whose previous owner (the importer) had no mileage.

This article was published in Globes, Israeli Business News – en.globes.co.il – on July 4, 2024.

© Copyright Globes Publisher Itonut (1983) Ltd., 2024.