Israeli car buyers are facing a significant shortage of popular car models due to Turkey's export ban, which was implemented in May 2023 amid the ongoing conflict in Gaza. The Turkish Ministry of Trade imposed a comprehensive ban on all exports and imports to and from Israel, citing the exacerbation of humanitarian tragedies in Palestinian territories. This decision has particularly impacted the availability of vehicles such as the Toyota Corolla, which is manufactured in Turkey. Historically, Turkey has been a major supplier of vehicles to Israel, being the largest exporter outside the Far East. However, with the ongoing conflict, importers are now left scrambling for alternatives, as the ban is expected to last well beyond the current war.
The implications of this ban extend beyond immediate supply shortages. Automotive manufacturers have thrived in Turkey due to its strategic location, generous subsidies, and low production costs. Consequently, the absence of Turkish-made vehicles in the Israeli market will force dealers and importers to explore other markets, which may increase costs due to the need for compliance with Israeli legal requirements and higher transportation fees. While some dealers may attempt to circumvent the ban by sourcing vehicles through intermediaries, this approach is likely to further inflate prices for consumers.
In the wake of this situation, the Israeli market is anticipated to see a surge in Chinese vehicles as importers seek to replenish their stocks. However, challenges loom on the horizon, as Chinese manufacturers are shifting their focus to produce vehicles in Turkey for the European market, potentially limiting their output for domestic use in Israel. The economic relationship between Turkey and Israel has seen a significant decline, with Israeli exports to Turkey dropping from $2.5 billion in 2022 to $1.5 billion in 2023, reflecting the growing tensions and the impact of geopolitical decisions on trade.
- The ongoing conflict in Gaza has not only disrupted the automotive sector but has also strained the broader economic ties between Turkey and Israel. In 2023, Israel ranked 13th for Turkish exports, with total exports amounting to $5.42 billion. This decline in trade signals a significant shift in the economic landscape, as both nations navigate the complexities of their diplomatic relations amidst ongoing tensions.
