Israel’s vehicle industry has begun 2026 with lower prices on the official price lists for new models. In the past, such a step was considered "taboo" in the industry due to concerns about the decline in value of used-cars already in customers' hands. So almost every January, various reasons were found for price increases, from changes in tax benefits to "manufacturer policy abroad." Discounts, if they occurred, only happened behind the scenes through increased discounts for vehicle fleets and specific promotions.
But in the 2025 sales year, the rules of the game changed as many importers moved into "survival mode," where they are still today. The taboo has been broken, and 2026 has opened with official price cuts or, at the very least, importers' willingness to absorb the tax changes without passing them on to the consumer.
From Chery to Skoda and Tesla
Examples of this can be found in a variety of market segments, mainly with Chinese cars, but not only. Freesbe, for example, opened the year with discounts on three strategic series of the Chery brand. The list price of the Chery Tiggo 8 Pro Plug-in - the best-selling seven-seater vehicle last year - was reduced in its top version by NIS 5,000 compared with the 2025 price list. A basic version of the model has been launched for NIS 180,000, about NIS 10,000 lower than the previous basic version, despite negligible differences.
The basic version of the Chery Arrizo 8 sedan model (plug-in version) now costs NIS 160,000, down about NIS 15,000 compared with the basic version in 2025. The Chery Tiggo 4 Pro (gasoline version) is now the cheapest family crossover in Israel, with a list price of only NIS 115,000.
Lubinsky's MG brand has also "cut" the official price list of two key versions of the large E-HS model, which was launched in Israel only last May. For 2026 he official price of the hybrid and plug-in versions has been reduced by NIS 8,000.
Skoda has already published a series of discounts for the 2026 price list in December, including on strategic models such as the Octavia of which tens of thousands of cars are procured for vehicle fleets. The Octavia has been discounted by an average of about NIS 3,000, while the Fabia’s price has been cut by NIS 4,000 to NIS 6,000.
Subaru started the year with the launch of an upgraded model of the Crosstrek crossover (larger engine and enhanced accessories), but chose to leave the price unchanged compared with the 2025 model. Fiat has cut prices of the Doblo light commercial vehicle series from the 2026 model by up to NIS 16,000, while Mercedes launched the 2026 models of the best-selling CLA series at a price tens of thousands of shekels lower than the previous model.
Tesla joined this long list at the end of last week, launching a basic version of the Model 3 for NIS 194,000, almost NIS 30,000 cheaper than the previous version, despite marginal differences in specifications. Although this is part of a global strategy, in Israel the discounted model landed right at the height of the increase in the purchase tax on electric vehicles, which particularly hit the price segment in which it competes. But Tesla has performed "pricing acrobatics" to keep the car below the psychological threshold of NIS 200,000.
These are just some examples from the opening price lists for 2026. It is important to stress these are not temporary discounts or zero kilometer promotions, but a change in official price list prices. These will likely form the basis for further discounts for both private and institutional customers.
Reasons for the discounts
There are several reasons behind the unusual trend, some of which are obvious and some less so. One of the main reasons is the favorable exchange rates for importers. The US dollar is at an almost four-year low against the shekel, and the euro is at its lowest level in three years. This means that new inventories provide importers with major exchange rate margins and unlike in the past, they are "sharing" this profit with customers.
Another obvious reason is the deepening competition in the market. The industry opens 2026 with "backlog inventories" of tens of thousands of "zero-kilometer" vehicles, the majority of which were released from customs at the end of 2024. These are weighing down the importers' balance sheets and compete directly with the new 2026 models for customers.
If that were not enough, more new models are constantly flowing into the market, provoking a tough price war. In such a competitive situation, raising the prices of 2026 models would serve no practical purpose, at least until the old inventories are offloaded. Since, in this market, customer brand loyalty does not exist, it seems that importers' commitment to preserving second-hand values is also decreasing.
Among hidden reasons for price cuts, especially in the Chinese sector, are new and major regulatory changes in China. These include a mandatory requirement to improve energy efficiency, dramatically increase the range of plug-in models, and upgrade batteries. The stricter China 7 environmental standard will also soon be added, which will significantly limit the ability to market standard gasoline engines.
The meaning of this flood of regulatory changes is that during the year it will not be possible, or will not be profitable, to market many recently manufactured models in China. As a result, manufacturers are eager to export these stocks even at a nominal profit, or below cost prices.
Another reason is the fact that the automotive industry, and especially the large importers, is currently under the regulator's magnifying glass. In the coming months, the Ministry of Transport will unveil new recommendations to increase competition aimed at lowering the cost of living.
In such a situation, raising the prices of 2026 models, whether justified or not, would not be a wise move for importers. The current discounts have another strategic advantage: the price war creates a substantial barrier to entry for new and small importers with limited resources. And since the customer is the ultimate beneficiary of this campaign, it is doubtful whether the regulator will have grounds to intervene.
Temporary or permanent situation?
The big question is whether this is a temporary situation or an ongoing trend. Most importers treat the current period as a waiting period, with their finger resting on the Excel sheets of the price lists, ready to bump up the price as soon as market conditions change. The vast numbers of vehicles at the ports shows that there is still cautious optimism in the industry.
Either way, it is clear that this is a historical precedent that reflects the change in the industry. If until recently the traditional sales slogan was "This year’s models at last year’s prices," now the slogan has been superseded by "2026 models are cheaper than 2025 models."
Published by Globes, Israel business news - en.globes.co.il - on January 13, 2026.
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