"On the eve of the revolution in car prices, I call on you: don't buy new cars until prices fall! Speak with your families and friends, and tell them," wrote Minister of Transport Yisrael Katz on his Facebook page today. Earlier this week, Katz said that prices of new cars would fall by 20%, and that prices for spare parts would plummet, as the result of the licensing reform.
An investigation by "Globes" found, however, that car prices will actually rise.
"On Sunday, I passed an important reform in motor vehicles competition," said Katz. "Soon, when the legislation in complete, general competition will begin in the motor vehicle industry between current importers, who enjoy monopoly and exclusive rights, and new importers, and everyone will have to compete and lower prices. This is true for vehicle imports, vehicle repairs at garages, and the sale of spare parts. This measure will help lower the cost of living in a sector that is the second most important after housing.
"Meanwhile, I reiterate and call on you not to buy new vehicles until importers lower prices and give you the discounts currently given to leasing companies and other special interests, because you deserve them too. Just to grab your attention, vehicle imports total NIS 30 billion a year, which is shared by 15 families of vehicle importers."
Katz concluded, "This is your chance, people of Israel, to prove to the importers that the party of excess profits at the public's expense is over. Just like the Open Skies reform, I promise you that I will continue to lead the motor vehicle reform until every Israeli citizen will feel the change in his pocket. I will not be deterred by pressure, strikes, or threats."
Published by Globes [online], Israel business news - www.globes-online.com - on April 30, 2013
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