A study by "Globes" found that most leased cars that will be supplied to IDF lieutenant colonels - about 3,000 cars - are Hyundai Accents, manufactured at the South Korean carmaker's Izmit plant in western Turkey. The pretax value of the export of these cars to Israel is estimated at $22-25 million.
In addition, the main winner of the tender to lease cars to IDF majors is Hyundai, through Hyundai Motors Israel Ltd., with its I20 model. Hyundai Motor Company (KSX: 5380) recently moved a production line of the I20s from India to Izmit, after Turkey offered good tax breaks.
Earlier this month, the Turkish media reported that $75 million was invested in the new production line, which will employ 1,000 persons. Most of the cars are slated for export to Europe. The estimated pretax value of the I20s that will be exported to Israel for delivery to the IDF is $6-8 million. Some of the I20s may be delivered from inventory, and were built in India.
A source close to the IDF believes that, despite the symbolism of officers' cars, the defense establishment will not openly boycott these cars because of their Turkish origins, in order to "avoid heating up relations with Turkey even more."
Published by Globes [online], Israel business news - www.globes-online.com - on June 23, 2010
© Copyright of Globes Publisher Itonut (1983) Ltd. 2010