Turkey's Trade Ban With Israel Impacts Auto Market, Denies Israelis New Models
Translated & summarized from Walla by baba
Turkey's President Recep Tayyip Erdoğan's May 2024 trade embargo has halted direct car imports to Israel, impacting consumers' access to new models like the Hyundai Bayon and Ioniq 3. Major automakers are not challenging the embargo due to Turkey's larger market and significant investments there. Instead, vehicles are rerouted to other markets, and Israeli importers face higher costs through third-party channels, leading to increased prices for Israeli buyers.
The story in 5 lines · by baba
- Turkey's President Erdoğan's trade embargo has stopped direct car imports to Israel.
- Israeli consumers are missing out on new models like the Hyundai Bayon and Ioniq 3.
- Major automakers are avoiding conflict with Turkey due to economic factors.
- Cars intended for Israel are being redirected to other European markets.
- Parallel importers face higher costs, increasing prices for Israeli buyers.
Turkey's comprehensive trade embargo, imposed by President Recep Tayyip Erdoğan in May 2024, continues to significantly affect Israel's automotive market. What began as partial export restrictions in April 2024 escalated into a complete halt of all trade and shipping between the two nations within a month. Turkey has established itself as a major automotive power for Europe and the Mediterranean, historically supplying nearly ten percent of new cars entering the Israeli market.
The closure of direct import channels means Israeli consumers are missing out on advanced, fuel-efficient, and affordably priced models, such as the newly unveiled Hyundai Bayon. The second-generation Bayon, showcased at the Paris Auto Show, represents a design shift towards a rugged, compact SUV aesthetic, featuring a longer wheelbase for improved rear legroom and a modern interior with dual 12.3-inch screens. It offers a new full hybrid powertrain combining a 1.6-liter gasoline engine with an electric motor, producing 138 horsepower and an estimated 20 km/liter, alongside updated turbocharged gasoline engines.
Another significant loss for Israeli buyers is the Hyundai Ioniq 3, an affordable electric vehicle designed to compete with models like the Kia EV3 and Volkswagen ID.3. Hyundai invested over a quarter-billion euros to upgrade its İzmit, Turkey, factory for its production, even ceasing i10 production for Europe to make space. The Ioniq 3, available in two battery variants, offers ranges of approximately 343 km and 435-482 km, with fast charging capabilities and a projected European price of €30,000-€33,000. If imported to Israel under electric vehicle tax incentives, it would have cost an estimated ₪145,000-₪155,000.
Major international automakers, including Hyundai, Toyota, and Renault, have chosen not to challenge Turkey's embargo legally or politically. This decision stems from the vast economic disparity between the markets; Turkey's domestic car market is nearly a million vehicles annually, with hundreds of thousands more exported to Europe, while Israel's market is around 300,000 vehicles. Automakers have billions of euros invested in Turkish production facilities and fear repercussions like fines or regulatory delays from Erdoğan's government. Instead, cars intended for Israel are rerouted to other European markets, and Israeli parallel importers face complex, costly workarounds through third countries, ultimately increasing prices for Israeli consumers.