The minister of finance has approved a request by the Knesset Economics Committee to cut the purchase tax on hybrid cars from 40% to 30%. The measure follows a bill by Economics Committee chairman MK Amnon Cohen (Shas) and MK Ilan Shalgi (Shinui) designed to lower prices for hybrid cars, and include them in value group 4, so these cars could be marketed to leasing companies and for car fleets.
Hybrid cars pollute much less than gasoline-driven cars. Cohen said 70% of cars sold to leasing companies are leased to companies, and classifying hybrid cars in group 4 would make them more worthwhile.
Cohen emphasized that the tax cut would not apply to luxury cars and expensive SUVs, but to family hybrid cars. As a result of the tax cut, the price for the Toyota Prius, the only hybrid car sold in Israel, is expected to fall to the upper limit of group 4 NIS 165,000.
Honda importer, Mayer’s Cars and Trucks Ltd., will shortly begin importing the hybrid Civic model, which will cost NIS 140,000-160,000.
Within two years, the choice of hybrid cars will greatly expand. Toyota will market its hybrid models of the Corolla family sedan and Previa minivan, and Honda is considering marketing its hybrid Accord model, which has already been on sale in the US for several months.
Ford importer, Delek Motors Ltd. is considering importing a hybrid model of the Ford Escape SUV, which has on sale in the US since the beginning of 2005.
Published by Globes [online], Israel business news - www.globes.co.il - on December 5, 2005