Monday, July 12, 2010

Update: Car Importers

Back in April I discussed a change in the law that would hopefully reduce the price of new cars by breaking the monopoly of car importers and the little cartel that exists between them and the leasing firms.

I am happy to update our readers that already at least one firm has taken advantage of the new law and has begun importing cars directly.

The first firm is the Shlomo Sixt car rental (and leasing) agency. Here is a fascinating interview with the company's founder Shlomo Shmeltzer.

Will this translate into reduced prices for the rest of us? It might take a while, but I believe the answer is yes.

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1 comment:

josh said...

I doubt it. The big money for the big leasing companies is in their inventory of thousands of used cars on the road that they are waiting to unload after the standard three year contract or when someone breaks thier lease in the middle. If the price of new cars goes down, the used car market is also affected, and subsequently their sales reduced. They are entering the market not for the good of the country, but so that they can cut the middleman car importer out of the picture.

I read in Globes that Amdocs has the 2nd largest leasing fleet after the army, and they are ending their contract with Sixt (so is the army who is moving to another company) by going directly to the importers and creating new mini-leasing companies for this purpose. No more leasing middleman, repairs are done at the official garages, and probably no reduction in the price to the worker, so the company can save millions a year.

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