How a War Ending Could Reshape the Auto Market
The article says the expected end of the war between the United States and Iran, likely to be announced this week, could change the global car industry and also affect Israel's market. Since March, the sector has been waiting for relief after the conflict disrupted raw material supplies, then boosted electric car sales in Europe as oil prices climbed.
Globally, the biggest immediate effect has been on supply chains. Closing the Strait of Hormuz disrupted carmakers, especially Asian manufacturers, by cutting off materials including oil for plastic parts, helium from Iran, aluminum from Gulf states, and other inputs. Toyota, Hyundai and others reported shortages, but they are now expected to gradually return to optimal production over the coming weeks. For Israel, the direct impact is limited because importers stock up in advance and cars arrive months after production.
Another effect is the reopening of shipping routes and logistics hubs in the Gulf. Asian automakers are expected to resume activity and redirect more output to markets with shortages, which could eventually influence Israel. A consumer rebound is also expected, with postponed purchases now returning, especially in luxury goods such as supercars and German premium cars. That could reduce global supply in the luxury segment and affect Israel most there.
Oil prices are expected to stabilize, but any lower shipping costs are too small to matter much for Israeli buyers. In Europe, electric car sales, especially Chinese models, surged when fuel prices rose, and Israeli regulations track Europe, though the local effect is expected to be minor. In the United States, cheaper oil should help domestic carmakers, but Israel is barely exposed to that market.
Locally, the market has already weakened. Dealers launched dozens of promotions in June, after May became the first month this year in which they again used heavy end-of-month incentives. The slowdown reflects strong early-year sales, fleet purchases, and the fact that summer competes with family vacations costing 50,000 to 100,000 shekels. The article also says the war did not stop Israelis from buying cars, so no major postwar buying surge is expected. With inventories high and the dollar rising after a period of strength that helped imports, the market is likely to remain full of discounts through the summer.
