Two Israeli bus makers have won a tender to produce electric buses for the local market. The companies will work with Chinese bus manufacturers to produce the buses based on frames supplied by Chinese companies. The deal to produce a total of 150 buses is worth NIS 55 million.
Once, Israeli buses were made, or at least finished, in Israel – but like with so many other manufactured products, it’s cheaper to import buses from China. As a result, Israeli firms Ha’argaz and Merkavim, which produced locally built buses on imported manufactured steel parts from Europe, have seen their business diminish by half in recent years. It turns out that it is 20- to 30-percent cheaper to import ready-made buses from China than it is to build the buses in Israel of parts and engines manufactured in Europe.
As a result, Chinese products have over the past decade become a major presence in the Israeli bus market, with 45 percent of all buses that took to the road in 2016 made in China. A total of 1,000 buses were introduced in 2016, double the number in 2015 – with the increase attributed to the fact that bus companies can afford to buy more buses because they are cheaper.
The growth in the import of buses has come at the expense of the Israeli companies, which have been around since the early days of the state, and once built all the buses used by the Dan and Egged bus companies. With the new deal, industry officials said, the two companies will see their fortunes rise again. A total of 150 buses will be built under the deal, with Egged getting 92 of them, and the rest going to several small bus companies.
Meanwhile, the Transport Ministry last week authorized Egged to import 170 new conventional buses, to be made in China. The deal with China Motors is worth NIS 116 million, a cost of NIS 680,000 per bus.