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The disappearance of this or that model from the range of models offered by a car importer is not such a rare occurrence. Cars come to the Israeli car market and cars go new in the mornings, but in the case of the Ionic this is an exceptional case.
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Hyundai Ionic Hybrid. Repressed from the top of the sales table
First, Hyundai is no longer a brand, it is the best-selling car brand in Israel. Second, the Ionic is no longer a car. It held the crown of Israel’s sales queen in 2017, meaning it was the best-selling car in the country and also held excellent places in the sales charts from 2018 to 2021 with more than 50,000 Ionics traveling on Israeli roads.
And another important fact: the Ionic is not a car whose importation into Israel is stopped because the global Hyundai no longer produces it. Hyundai plants in Korea continue to emit Hyundai Ionic but Colmobil, the importer of Hyundai, no longer has the appropriate conditions to import the Ionic to Israel.
What made the Hyundai Ionic the sales queen? Is this an exceptional performance? Impressive fuel economy? Extreme safety? The answer is no. Hyundai Ionic was Israel’s sales queen because of an excellent combination of taxation policies that benefited with the hybrid cars until last January, an excellent connection to the vehicle fleets and the fact that it is a small, hybrid family car sold at the price of a non-hybrid family car.
Once the tax benefit for the hybrid vehicle ended in January and once the weight of the large vehicle fleets weakened in favor of the private customer, Colmobil made a decision that there was no more point in importing the Ionic. This decision illustrates the importance of the factors that make a car “Israel’s car.” Moreover, it illustrates how once the same factors disappear – there is no more point in importing the model into the country.
Hyundai Ionic was the sales queen three years ago. Today, the Israeli car market is dominated by a car that is actually a kind of evolution of the Ionic. Thus, the Toyota Corolla is the best-selling car in Israel as of 2021.
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Toyota Corolla. The best-selling in 2021
(Photo: Udi Etzion)
Even in the case of the Corolla, this is a car that is actually hard to say is much more than a tool. It is not unusually designed, not exceptionally safe, not performable. It’s just a hybrid. That is, she was entitled to the same tax benefit that was due to the Ionic. But the Corolla has another weapon: it is a car made in Turkey and therefore receives a 7% customs benefit given to vehicles imported from the EU.
Before we deal with the question of what actually makes a car “Israel’s car”, it is worth looking at what is happening in other global markets. The best-selling car in the US for example is not a car, but a pickup: Ford Series F. The best-selling car in Europe is far from hybrid: last year Volkswagen Golf was the sales queen of Europe.
And what makes a car the “people’s car” in Israel? Historically, unlike in Europe, where a car is sold on the basis of quality, or in the US, where a car is sold on the basis of usability, in Israel since the 1970s the market queens have won a title based on three main criteria: reliability, marketability and the fact that it could simply be bought.
This is the reason why in the early 1980s a fairly small Japanese car manufacturer that specialized in dual-propulsion vehicles was able to find a market in Israel that did not express any interest in dual-propulsion models, did not want equipment and only wanted the engine not to break down. Thus, during some of the 1980s, Israel became the second largest market for Subaru, which took advantage of the Arab boycott that prevented Toyota, Nissan and others from marketing cars in Israel.
In the early 1990s it was another small carmaker that simply copied Subaru’s format but added a rare element that Israelis were unfamiliar with: electric windows, a central lock and even an original air conditioner – and the crown passed to Mitsubishi. What all the queens of the market have in common is the fact that these were never brilliant cars, but only cars that met the formula that suited Israelis.
But in the 1990s a change took place: high-tech rose and to secure the sales crown required the ability to sell directly to vehicle fleets. The solution was from a small Japanese carmaker: a Mazda Lantis in an “Israeli” version with a 1.6-liter engine became the car of every worker. Here a fundamental change took place, and the institutional market became the core market. A new rule has been established: in order to produce public opinion, the institutional market must be controlled.
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Mazda 3. was the favorite of the vehicle fleets
(Photo: Amit Shaal)
Another change in the market then took place when leasing companies entered the picture. In practice, those who wanted to sell a lot had to go through the executive offices of three companies. On the one hand, an easy task. On the other hand, a particularly demanding task of working in front of those who demand huge discounts. The weapon was another Mazda for the people sitting in Zion: Mazda 3. All these cars were the queen of the market, proven sales hits, first place. But in 2016 the rules changed with the introduction of a new factor: tax benefits for hybrid vehicles, which made the Ionic king as the market queen.
If so, in Israel the rule is clear: a gray car, low purchase tax, a significant market share in the large vehicle fleets. But 2022 is a new and crucial year for the Israeli automotive industry for several reasons. First, there is no reduced purchase tax on hybrids. Second, the strength of the vehicle fleets weakened. Third, the major automakers are still facing supply difficulties.
The natural default of the automotive industry is to market well what has tax purchase benefits on it, i.e. electric vehicle and plug-in hybrid vehicle. But here there is another problem: the number of popular plug-in hybrid models marketed in Israel is slim. The number of electric vehicles is increasing, but in the case of the automotive manufacturers, these are vehicles with prices hovering in the region of NIS 170,000 or more.
Factually, the sales queen of Israel has never been a NIS 200,000 car and it is doubtful it ever will be. This leaves Chinese automakers in the picture. Some are limited in supply capacity due to Israeli regulations that limit the annual number of deliveries and some are not limited but suffer from another problem: lack of charging infrastructure in the institutional market (ie with customers) or customers who do not yet want to switch to tram.
Therefore, deciphering the identity of Israel’s sales queen for 2022 will be particularly difficult and will express a struggle between tax considerations, the introduction of new technologies and the weakening of vehicle fleets.
But one fact is undisputed: the car that will win the title of sales queen of 2022 will probably be a car that does not excel in any feature, except of course its ability to sell well.