Israelis just aren't driven by environmental cares

<a href=\'http://www.haaretz.com/hasen/spages/608433.html\' target=\'_blank\'>Israelis just aren\'t driven by environmental cares (click here for the complete article)</a>

By Yoav Kaveh

(excerpts)

Israel is the only country where you can buy the hybrid gasoline-electricity-powered Toyata Prius and get immediate delivery. In the United States, even though Toyota has increased production by 50 percent this year, there is a months-long waiting list of thousands of buyers, unless the buyer's name is Leonardo DiCaprio, Cameron Diaz, Meryl Streep or Brad Pitt. Celebrities do not have to wait in line and do not even have to pay the full price.

In 2004, only 10 Israelis bought a Toyota Prius. In the first six months of 2005, this number more than tripled, to 36, while the Toyota Corolla sold 4,015 units. The failure of the Prius, however, is only one example of basic Israeli apathy and lack of awareness of environmental issues and fuel economy.

Salesmen in the polished showrooms of Hamasger Street in Tel Aviv seldom encounter customers whose car purchase decision is based on fuel consumption and low emissions. The most common questions are about discounts and bonus gifts. Even if someone does wonder aloud about emissions data, he won't find any.

Practically none of the glossy brochures printed by the importers - praising the amazing magnesium alloys in the car's body and the perfectly balanced air-conditioning system - mention anything about air pollution.

A new Toyota Prius costs NIS 180,000. It is a sophisticated, almost futuristic car that can run on electricity alone for short hops at relatively low speeds. At higher speeds, the gas engine starts automatically and joins the effort. The gas engine also recharges the electric batteries, so that the car never has to be plugged into a socket (and doesn't even have a plug point).

Israeli drivers are suspicious of hybrid cars, are afraid of breakdowns and of buying a car "for life," - one that they won't be able to sell on the second-hand market. When spending NIS 180,000, the Israeli driver prefers an "executive car," like the Mazda 6 or Honda Accord, or an all-terrain vehicle such as the Hyundai Tuscon.

The heaviest Israeli celebrity who sits behind the wheel of a Prius is Transportation Minister Meir Sheetrit. The Finance Ministry is trying its own methods of promoting sales of these economical cars. In 2004 the ministry announced a huge discount on the purchase tax on hybrid cars: 40 percent instead of 95 percent. This lowered the price of the Prius from NIS 230,000 to NIS 180,000.

The Knesset Finance Committee is currently examining a proposal to reduce this tax to 10 percent and to grant a tax credit of two tax brackets to anyone who accepts a hybrid company car from his employer. This would mean paying income tax on a car perk of NIS 1,980 per month, instead of the current NIS 2,940.

Toyota's importer, who is still the only player in the hybrid car market, has sent a representative to the committee to promote the bill. Treasury officials, however, are aware of its problematic.

"We want to promote green cars, but are afraid of making a mistake," said Boaz Sofer, senior deputy director general at the Department of Customs and VAT. "Imagine if tomorrow a luxury hybrid jeep arrives in Israel, one that is more economical than a regular gas-powered jeep, but less economical than a station wagon. Should the discount apply to the jeep? And what if next year importers offer a car like the BMW 7 Series, but with an environmentally friendly hydrogen-powered engine? People will jump at the opportunity to save NIS 100,000 on a fancy car, not for ideological or environmental reasons."

The Prius is currently the only hybrid car sold in Israel. Honda's importer considered marketing that company's hybrid, the Civic IMA, but realized that the minimal demand for a hybrid car, especially one with manual transmission like the Civic IMA, did not justify the effort. Early next year a new hybrid Civic, with automatic transmission, will be marketed here at about NIS 145,000, almost the same price as the Civic 1.6-liter car with manual transmission. The goal is to sell 300 hybrid Civics in 2006.

Although this is a revolutionary number in local terms, American market forecasters are predicting sales of 200,000 hybrid cars next year, or 10 percent of all medium sized family car sales. One American market research company, Booz Allen Hamilton, predicts that by 2015, hybrid car sales will account for 80 percent of the entire U.S. car market. Then there will be the electric cars powered by hydrogen fuel cells, but they are another story.

Click here for the Hebrew vesrion of the article.