(photo credit: Courtesy Photo)
The high end of the luxury car market, or cars with a price tag that exceeds NIS 250,000, is very small indeed, amounting to just slightly more than 2 percent of all vehicles sold in Israel.
Indeed, only 3,400 such cars were sold in 2005 and the company that brought in the highest number of sales last year was Mercedes, with 903 cars. BMW came second with the sale of 820 luxury vehicles.
Traditionally, in this upscale market, Mercedes and BMW rank first and second, while other top-of-the-line car manufacturers fall far behind. In 2005, for example, Volvo sold 392 cars; Jaguar 72; and Porsche a mere 31.
This situation is rather perplexing, as it goes against global trends.
In 2005, BMW sold more luxury cars worldwide than any other auto maker in the world, yet Mercedes managed to win the top slot in the very high end of the market in Israel. This was due mainly to an aggressive sales strategy and a well-financed publicity campaign.
According to figures published by Yiphet, a company that monitors media ads, Mercedes spent NIS 7.7 million on its publicity campaign in 2005 compared to NIS 3.8 million in 2004. If you calculate the amount of money spent on publicity in relation to the number of cars sold, the resulting figure is NIS 8,500 per car.
In addition, Mercedes approached the market using a very aggressive pricing strategy. The less expensive Series C Mercedes costs NIS 264,000, compared to NIS 295,000 for the BMW Series 3 cars. In the more expensive executive type cars, Mercedes sold its E-280 3 liter model for NIS 450,000 compared to NIS 495,000 for the BMW 530 3.0 liter model.
There was also a large price differential in the SUV type. Mercedes sold its new ML350 for NIS 509,000 compared to NIS 540,000 for the veteran BMW X5 model.