Prices of new cars to rise sharply after Passover
Israel’s vehicle industry is preparing for a wave of price increases after the Passover holiday next week. Usually prices of new cars rise at the start of the year but car importers claim that prices rises in the second quarter this year stem directly from price hikes by most car manufacturers as a result of the Russia-Ukraine crisis.
One large car importer told “Globes, “Car manufacturers are now facing a significantly different and higher production cost base due to the sharp rise for factories in the world in recent weeks in energy prices, raw materials of all types for cars, and prices rises for land and sea transportation and inflationary salary pressures.”
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Sources in the industry say that the continuing shortage of new cars worldwide, which worsened following production disruptions in China, allow manufacturers to pass on price rises to importers ‘without bargaining.’ In addition, those sources add that shipping costs have doubled from about $100 per cubic meter in the second quarter of 2021 to about $200 per cubic meter today. Shipping costs alone add thousands of shekels to the price of the car.
So far only the Lubinski Group, which imports Peugeot, Citroen, Opel and MG cars, updated its price list at the beginning of April, with the price of popular models rising by 2%-10%. Other importers are also considering price rises on cars in the coming few weeks including hybrid and electric vehicles.
Sources in the car industry say that the strength of the shekel has acted as a shield, preventing even sharper price rises but that nevertheless, price rises are inevitable.
Published by Globes, Israel business news – en.globes.co.il – on April 20, 2022.
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