THE AUTOMOTIVE INDUSTRY IN ISRAEL
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THE AUTOMOTIVE INDUSTRY IN ISRAEL
TABLE OF CONTENTS
Defining the Automotive Industry 5
Segmentation of the Automotive Industry 6
The Global Automotive Industry 8
Global Trends in the Automotive Industry 10
The Automotive Industry in Israel 14
Segments 14
Israeli smart transportation and alternative fuels developments 15
Selected Israeli Companies 20
Footnotes 30
2016 | 3
DEFINING THE AUTOMOTIVE INDUSTRY
Traditionally, the automotive industry includes
all the activities related to the manufacture
of light- and heavy-weight vehicles, including
the production of parts (such as motors and
chassis), systems and technical units, but not
including tires, batteries and fuel.1 A broader
definition includes the manufacturing industries,
as well as wholesale, retail (of vehicles, parts,
tires, and associated products), and repair
and maintenance services.2 Recently, with the
increased global interest in smart transportation
and alternative fuels, these areas are often
included in automotive industry reviews and
analyses as well.
2016 | 5
SEGMENTATION OF THE
AUTOMOTIVE INDUSTRY
The automotive industry is often segmented for Tier 2 suppliers, such as steel sheets or
based on tiers. Automotive assembly is heating services.
considered the starting point, while all other
5. Tier 4 – Tier 4 suppliers provide basic raw
activities are described as "upstream" or
materials such as iron and glass to Tier 3
"downstream" from assembly, based on their suppliers. This tier is often included in the
chronological position before or after assembly Tier 3 category.
on the value chain. This segmentation includes
6. Downstream activities – Companies that
the following3:
are downstream on the value chain from
1. Original Equipment Manufacturers (OEMs) – OEMs and engage in the sale and distribution
Companies that manufacture or assemble of automobiles, and the provision of
the final product. Automobiles that are maintenance and repair services.
manufactured under a certain brand name
Certain companies may supply products for
may include parts manufactured by multiple
multiple tiers, depending on the companies
suppliers (e.g., tires, motor, brakes, etc.), but
for which they manufacture their products,
only the company that assembles the final
leading to their inclusion under two different
product is considered an OEM.
categories simultaneously (see illustration 1).
2. Tier 1 – Tier 1 suppliers manufacture
components used for final automotive
assembly. These suppliers work with OEMs
in order to manufacture parts (internal
or external) as needed. These parts can
be divided into two categories – Original
Equipment (OE), which is sold to the OEM
to be part of an entire automobile; and
Aftermarket/Secondary Market products,
which are either spare parts or accessories.
3. Tier 2 – Tier 2 suppliers manufacture value-
adding parts for Tier 1 suppliers for the minor
sub-assembly phase.
4. Tier 3 – Tier 3 suppliers provide more simple
engineered materials or special services
6 | THE AUTOMOTIVE INDUSTRY IN ISRAEL
vehicles in the vicinity, and help drivers
The automotive industry is often safely and efficiently operate their vehicles.
segmented based on tiers. Automotive The companies in these fields specialize
assembly is considered the starting point, in communication between vehicles,
while all other activities are described communication between vehicles and
as "upstream" or "downstream" from infrastructure, information security, voice
commands, optical systems, biometric
assembly, based on their chronological
identification, and more.
position before or after assembly on
the value chain. 2. Improving and streamlining production
processes – Companies that supply
components and software for the
In addition to this segmentation, there are other
automotive industry, which are designed
advanced industries that focus on innovation,
for the companies and factories themselves
software and streamlining production.4
and not for the automobiles that they
1. Electronics, software, innovation and driver manufacture. These include assembly line
assistance – Companies that specialize monitoring software, information security
in developing hardware and software for communications between manufacturers
components that integrate vehicles into and sub-suppliers, analysis systems for big
an advanced technological environment, data obtained from the use of vehicles, sales
enabling them to communicate with other information and more.
Illustration 1 – Segmentation of activities by tier and field
7
THE GLOBAL AUTOMOTIVE INDUSTRY
Background and of investment in a variety of other industries.6
Similarly, each position in the automotive
economic importance industry generates five additional jobs in
The automotive industry and automotive culture related industries. Therefore, an estimated 9
have reached every corner of the globe over
million workers are employed in the automotive
the last century, and have significantly shaped
industry worldwide, while nearly 50 million are
economic development. The global automotive
employed in jobs that are indirectly related
industry now employs tens of millions of people
in many different countries worldwide, and to the automotive industry (manufacturing,
the demand for additional vehicles is growing services, etc.).7
constantly. The automotive industry is constantly
changing and experiencing technological,
regulatory and consumer developments.5
The automotive industry and automotive
The automotive industry generally spills over
culture have reached every corner of
to other industries (such as metals, chemicals, the globe over the last century, and
textiles, etc.), which results in an estimated have significantly shaped economic
triple multiplier effect: each dollar invested in
development.
the automotive industry generates three dollars
8 | THE AUTOMOTIVE INDUSTRY IN ISRAEL
The global automotive market was valued China has been the largest market since 2009
at approximately $846 billion as of 2015, and its lead over the United States is growing.
representing growth of 4% compared to the
previous year. Though accelerated growth was
seen in North America and Europe, it was not
Each position in the automotive industry
enough to offset the deepening issues facing
generates five additional jobs in related
emerging markets such as Brazil and Russia. industries.
Growth projections for 2016 for the market
are in the 5% range, depending heavily on Production in 2015 hit an all-time record of 90
the macroeconomic conditions in the 4 major million vehicles8, and is expected to cross the
markets (China, US, EU and Japan), which 100-million vehicle threshold (for passenger
together account for 75% of global car sales. and commercial vehicles) by 2018.9
9
GLOBAL TRENDS
IN THE AUTOMOTIVE INDUSTRY
Pollution reduction According to the US Energy Administration,
reducing vehicle weight by 10% can reduce
and green vehicles fuel consumption by 6%–8%. However,
This trend is evident both in regulatory changes the use of alternative materials for vehicle
in various countries, and in technological production is limited by safety, reliability,
developments. From the regulatory perspective, comfort, cost and performance constraints,
automotive standards have become more rigid, which are dictated by the regulator and
and requirements to meet fuel consumption and by consumers. This creates the need to
pollutant emission targets have been introduced develop alternative materials that can
(e.g., Euro6 in Europe and CAFE in the US). 10
replace iron and steel (the standard iron
From the technological perspective, this trend and steel alloys comprise 45% of the weight
includes the following: in average vehicles). For example, materials
1. Reducing vehicle weight – The use of such as magnesium and carbon fibers can
alternative materials to manufacture certain potentially reduce the weight of certain
automotive parts, in order to lower vehicle vehicle parts by up to 75%.11 As such, in
weight, reduce fuel consumption, and limit recent years there have been significant
pollutant emissions. Heavy vehicles require attempts to lower the weight of new vehicle
a great deal of energy to accelerate, thus models, in order to reduce fuel consumption
increasing fuel consumption while driving. and pollutant emissions.12
10 | THE AUTOMOTIVE INDUSTRY IN ISRAELSeveral Israeli companies are currently in In Israel, the Israel Fuel Choices Initiative at the
advanced stages of manufacturing vehicle Prime Minister's Office has signed agreements
components, using plastic, aluminum, various with Fiat-Chrysler, Iveco and Magneti Marelli to
alloys (e.g., magnesium and zinc), and more.
The demand for these products is constantly
increasing, due to the ongoing necessity
of reducing vehicle weight, reducing fuel
consumption and minimizing pollutant
emissions. These companies include Raval,
Tadir-Gan, MPE, Omen Hatzor and Arkal.
2. Alternative propulsion systems – The
use of different types of motors and fuels,
which can replace the traditional polluting
propulsion systems that operate on diesel
and petrol. Highly pollutant propulsion
systems and new rigid regulations led
various automakers to develop alternative
propulsion systems that use fuels other than
develop natural gas-based fuels, which may
diesel and petrol. These systems include
electric ignition, the use of natural gas and be the basis for international cooperation
liquid hydrogen, and more. Vehicles that use (see Israeli smart transportation and fuel
propulsion systems of this kind have been developments chapter).
manufactured in the past and some are
currently in use on a relatively wide scale. Information
However, the existing solutions suffer from
several significant disadvantages compared
technology in vehicles
to the traditional propulsion system, such as Additional technological developments,
high cost, storage difficulties, short driving particularly in communications and software
range and lack of infrastructure. Work is technology, have resulted in the increasing
underway to develop a propulsion system integration of sophisticated components in
with advantages over oil-based ignition that vehicles. These developments are designed
overcome these disadvantages. 13
to improve driving safety, enable vehicles to
11GLOBAL TRENDS IN THE AUTOMOTIVE INDUSTRY communicate with other nearby devices, support lane, or of their likelihood of colliding advanced analyses, and more. Trends in this with another object, parking assistance, field include: traffic light identification, and more. 1. Driver-assistance systems – Road There are other systems that improve the accidents are a major cause of death in human-machine interface and attempt industrialized countries, and the risk of to help drivers perform certain functions vehicle collisions increases significantly without taking their eyes off of the road when the driver's attention is distracted or hands off of the steering wheel. These from the road for even two seconds – and interfaces are based on voice commands, eye even while the driver is watching the movement detection, and pop-up displays. road but is concentrating on other things. Systems of this kind are supported by the Driver-assistance systems that incorporate regulators, and some (the more veteran features such as sensors, cameras and systems) have become a mandatory part warning devices alert the driver to potential of safety regulations in the automotive threats on the road and facilitate certain market. Thus, in 2009, the EU required that driving functions. These include systems Electronic Stabilization Programs (ESP) be that alert drivers of deviations from their installed in all vehicles, and that advanced 12 | THE AUTOMOTIVE INDUSTRY IN ISRAEL
emergency braking systems and deviation and infrastructure will require modification of
alerts be installed in heavy vehicles. 14
the infrastructure itself. This is a complex and
Israeli companies such as Mobileye, costly process, which will require suitable
VocalZoom, Redbend and Guardian Optical funding.15
Technologies are developing advanced
3. Information security – In accordance with
products designed to assist drivers and
the communications and software trends
reduce the risk of road accidents. Their
products use automation (e.g., detecting described above, a growing number of
possible collisions), enhanced connectivity automotive systems are based on software
and voice commands. These products and on communication between various
enable drivers to operate the vehicle and components. Alongside the advantages of
its accessories without removing their hands these new developments, new risks are being
from the steering wheel or their eyes from presented by these systems, which leave
the road, and even provide an additional vehicles vulnerable to hostile penetration.16
layer of protection against collisions (using These risks have triggered great interest in
prior detection techniques). developing information security systems
2. Smart transportation – Integrating for vehicles, and have even resulted in
software and advanced communication government intervention. The US National
capabilities in vehicles in order to connect Highway Traffic Safety Administration
multiple vehicles, infrastructure and external (NHTSA) published safety guidelines for
devices. This communication helps reduce 2016, urging automakers to work together
road collisions, plan an optimal route, detect
in developing information security systems
changing traffic lights, and even warns the
for vehicles. In addition, Fiat-Chrysler was
driver of dangerous vehicles in the vicinity.
forced to develop a software update for
Related technological perspectives are
1.4 million vehicles in July 2015, due to
still being developed, as are the regulatory
the suspected high vulnerability of these
aspects of these developments. For example,
opening additional communication channels vehicles to breaches and unauthorized
for the vehicle to use to communicate with control. Large automakers such as Volvo,
its environment can also increase the risk Mercedes, Ford and General Motors (GM)
of malicious breaches of the system. In have already undertaken to comply with
addition, communication between vehicles the NHTSA guidelines.17
13THE AUTOMOTIVE INDUSTRY IN ISRAEL
Segments
The Israeli market consists of both veteran include forging, high-pressure ink injection,
companies that specialize in vehicle assembly metal injection, coating and reinforcement,
and Tier 1, 2 and 3 supply, engaging in traditional rubber injection, etc.
and advanced manufacturing processes, and
companies that specialize in innovation,
advanced technologies and facilitation of
The Israeli market consists of both
automotive manufacturing processes. veteran companies that specialize
in vehicle assembly, and companies
Vehicle assembly (OEM) and Tier that specialize in innovation, advanced
1, 2 and 3 supply technologies and facilitation of
1. There are several manufacturers in Israel automotive manufacturing processes.
that assemble the final automotive product.
These include buses, military vehicles and
others (trailers, containers, fire-extinguishing
Advanced technologies
vehicles, vehicle conversion).
(electronics, software, innovation
and driverassistance systems)
2. Tier 1 aftermarket suppliers: Over 60
Many Israeli companies develop aftermarket
Israeli companies manufacture aftermarket
systems and technological innovations related
products for the automotive industry. These
to driving and the automotive market. These
include spare parts and accessories such as
companies design, manufacture and supply
batteries, ventilation and airconditioning
diverse products including safety and driving
systems, fleet management systems, air
assistance systems, tracking technologies,
brake diaphragms, electric starters and
navigation and control systems, sensors, inter-
alternators, seals, thermostats, gears, gear
vehicle connectivity, cyber protection, voice
pumps, bearings and motor valves, filters
recognition and more.
and more.
3. Tier 1 OE suppliers: Over 50 Israeli companies Manufacturing processes
supply components to OEMs and Tier 1 to improve and streamline
suppliers worldwide, using advanced manufacturing
technologies to manufacture various types of Over twenty Israeli companies supply services
high-quality components that are tailored to and products that facilitate production processes
their customers' needs. These technologies for OEMs and suppliers in the various tiers. These
14 | THE AUTOMOTIVE INDUSTRY IN ISRAELproducts and services include manufacturing it shorter, safer and cleaner. In most cases,
control software, monitoring and assessment the concept of smart transportation includes
solutions, corrosion-preventing packaging Intelligent Transport Systems (ITS) that use
products, advanced tools for metal work, advanced technologies to achieve these goals.
software solutions for supply chain management, The definition of this new and developing field
3D printing solutions for accelerated prototype is not constant and is based on a variety of
design and production, and automatic welding approaches (e.g., use of technology, activities
solutions. performed by the system, goals of the system,
and the design approach).
Israeli smart
transportation and Smart transportation is the use of
alternative fuels different types of technology to
developments streamline travel, by making it shorter,
safer and cleaner.
Smart transportation
Smart transportation is the use of different types
Israeli smart transportation companies have
of technology to streamline travel, by making
become world-renowned for their achievements
in this field. These companies develop products
based on software innovation and cutting-edge
technologies, like products developed for the
automotive industry.
Smart transportation is a rapidly growing field
in Israel, with the establishment of many new
companies in recent years. These companies
are tightening connections with large global
corporations (such as IBM and General Motors)
and are quickly building their reputation in the
global smart transportation market. The most
noted example is Waze, which was acquired
15THE AUTOMOTIVE INDUSTRY IN ISRAEL
by Google. Following in its footsteps, many meetings with market leaders and investors,
other companies in the field are growing and and more.
establishing international partnerships. The companies that have joined the community
Israel is heading at high speed toward a include Elbit, Rafael, Phinergy, IAI, Mobileye,
promising future in the field. One example and international companies such as IBM and
is the establishment of the EcoMotion General Motors.18 When the community was
community, which encourages and initiates founded in 2013, there were approximately
activities related to smart transportation. The 70 Israeli startup companies developing smart
community was founded in cooperation with transportation innovations. As of mid-2016,
the Alternative Fuels Administration and other this number has jumped to over 300 startup
organizations, including the Israeli Innovation companies.19
Authority, Ministry of Science, United Israel
Appeal and NGOs, as well as leading figures Smart transportation is a rapidly growing
in the commercial and academic sectors. The
field in Israel, with the establishment of
community organizes conferences, professional
many new companies in recent years.
workshops, introduction to new technologies,
16 | THE AUTOMOTIVE INDUSTRY IN ISRAELThe Smart Transportation Accelerator benefits, government investments, grants and
was established in order to encourage more.22 Since the inception of the incentive
smart transportation and alternative fuel program in 2013, it has supported over 300
entrepreneurs. The accelerator operates as part companies, and the number of research groups
of the Center for Innovation in Transportation at has reached 190. The government also promotes
Tel Aviv University, and it receives approximately
NIS 1 million in annual funding. The program
offers four-month development cycles for
five initiatives at a time. During their time in
the accelerator, the entrepreneurs receive
approximately NIS 100 thousand, as well as
business advice and support from automotive,
technology and business development experts.20
Alternative fuels
Recent years have shown a significant increase
in the development of fuel alternatives that
are more efficient and less pollutant than the
common oil-based fuels (diesel and petrol).
The Israel Fuel Choices Initiative was launched
in 2011, and included the establishment of a research and commercial cooperation with
dedicated administration in the Prime Minister's various countries (US, Canada, Japan and various
Office. The administration is responsible for European countries), and with large international
promoting the development and integration corporations.23 As mentioned before, the
of fuel alternatives for transportation, in administration has signed cooperation
order to reduce Israel's dependency on oil agreements for the development of natural
for both security and sustainability reasons.
gas-based fuels with Fiat-Chrysler, Iveco and
The objective of this initiative is to reduce oil
Magneti Marelli.24
usage for transportation in Israel by 30% by
2020 and by 60% by 2025.21
The administration promotes the use of
alternative fuels in various ways, including tax
17THE AUTOMOTIVE INDUSTRY IN ISRAEL
Israeli Industry other countries and regions, such as the EU,
US, Mercosur (countries in Latin America),
Highlights EFTA (Iceland, Lichtenstein, Norway and
Switzerland), Turkey, Mexico, Jordan and
1. Innovation, software leadership, Egypt.28
advanced technologies – The Israeli
4. Experience and working relationships –
industry is known worldwide for its ability
There are many local manufacturers that
to develop new, cutting-edge solutions
have supplied components and parts to
for existing and emerging global needs.
large international corporations for decades.
Consequently, many companies, such as
These long-standing business relationships
General Motors and Daimler have R&D
have built confidence and close cooperation
centers in Israel. GM’s has been active for
with international companies, and are an
the last nine years, and in 2016 the company
important consideration when selecting
even announced its expected expansion.25
suppliers and ordering parts.
In addition, other companies such as Ford
have permanent scouting offices in Israel,
which seek relevant developments.26
Other companies send representatives to
conferences and make other visits to Israel
for this purpose.27
2. Full product support – The various
manufacturing companies in Israel support
product development cycles from the initial
design phase to final production. This is a
significant capability, with unique advantages
over the low cost mass production that is
available in other markets.
3. Geographic location – Israel is conveniently
located between the Far East and western
European markets. In addition, Israel has
signed free trade agreements that facilitate
commercial activity between it and many
18 | THE AUTOMOTIVE INDUSTRY IN ISRAEL19
SELECTED ISRAELI COMPANIES
Advanced and it employed 1230 people worldwide.34
Raval manufactures several advanced products,
manufacturing such as fuel tank venting systems with unique
innovative features, which can control and
reduce pollutant emissions from fuel. In addition,
the company continues to research and develop
Raval new and advanced venting systems.
The company develops and manufactures
Arkal Automotive
parts and mechanical and electromechanical
assemblies and sub-assemblies using plastic Arkal develops solutions for replacing metal
injection (including parts that are reinforced with structural components in vehicles with plastic
glass fibers) for the global automotive industry.29 parts. This reduces weight and requires less
This is a unique field, with only four companies assembly work, thus lowering production costs.35
worldwide, as of 2015.30 The company is a Tier The company is a Tier 1, 2 and 3 supplier for
1 and 2 supplier for automakers and large-scale companies such as Mercedes, Volkswagen,
suppliers. The company was founded in 1994 Fiat and others.36 It was founded in 1997 as a
and has since opened factories in Luxembourg, subsidiary of Arkal Plastic Industries, which was
Germany, Canada, China and the US.31 founded in 1963.37 In 2010, the company was
In May 2015, Raval received orders for parts acquired by Raval.38 Arkal has manufacturing
worth over €103 million from Volkswagen and sites in Israel, Germany, Spain, US, Poland,
Daimler Benz, as well as from Tier 1 suppliers France, Canada and China.39
that work with Fiat, Honda and BMW.32 In 2015, The company employs 200 people.40 As of
the company's total master agreement for 2014, Arkal exported products valued at NIS
2015-2030 was valued at over €1.1 billion , 33
288 million.41 The innovative skill developed at
Arkal for injection of thermoplastic, glass-filled
materials into molds has enabled the company
to manufacture strong plastic components
for leading automotive companies. These
components are adaptable and capable of
encompassing several small metal parts that
Plastic automotive components manufactured by Raval were originally installed separately into a single
20 | THE AUTOMOTIVE INDUSTRY IN ISRAELplastic component.42 In addition, Arkal and products include unique advanced cooling
General Motors Europe have registered several systems and thermostats with innovative
joint patents.
43 features that help improve fuel consumption
and motor performance.49 As a result, MotoRad
was one of the first companies to supply its
customers with patent-protected electronic
thermostat technology. In addition, the company
MotoRad
continues research and development in order
The company manufactures a variety of to supply new and more advanced products.50
products for global automotive companies,
including thermostats, pressure covers for
radiators, pressure covers for fuel tanks,
and more.44 The company is a Tier 1 and 2
supplier for large automotive companies and
suppliers, and manufactures parts for the [Thermostat manufactured by MotoRad]
secondary market as well. Its customers include
companies such as Porsche, SAAB, General
Motors, Jaguar, Land Rover and Audi.45 It was
originally founded in 1958 as a small tool Tadir-Gan Group
and die factory named Fishman Engineering, The group owns two factories in Israel – Ortal
and later began to manufacture thermostats and TadirGan. Tadir-Gan manufactures parts
for the automotive industry. Over the years, using aluminum casting technology, while Ortal
branches of the company were established in manufactures magnesium and zinc alloys using
North America, Germany and Mexico. In 2010,
46
high-pressure diecasting technology.51 The
the Tene Investment Fund acquired majority company is a Tier 1 and 2 supplier for large
ownership (66%) and in 2015, Fortissimo Capital companies such as General Motors, Volkswagen,
acquired full ownership of the company. 47
BMW, and more. It was founded in 1993 and
In 2015, the company employed 250 people. went public on the Tel Aviv Stock Exchange in
In 2014, the company recorded revenue 2004. In 2006, it acquired the Ortal factory,
of $65 million and operating profits before and in 2013, it acquired factories in Germany
interest, taxes, depreciation, and amortization and Poland that manufacture automotive parts
(EBITDA) of $25 million. 48
The company’s using die-cast technology. The FIMI Investment
21SELECTED ISRAELI COMPANIES
Fund holds 63% of the company’s shares The company supplies standard and customized
since 2011. Tadir-Gan has approximately 629 thermoplastic materials that incorporate glass
employees in Israel, Germany and Poland. Its fibers, glass beads and mineral fillers. The
cumulative orders are valued at $1 billion (as compounds are fire-resistant, damage resistant,
of December 2015). Tadir-Gan specializes in heat and radiation stabilized, and can be
manufacturing automotive components using modified and customized.57
unique aluminum and magnesium alloys that
replace the iron and steel parts traditionally
used in the automotive industry. This reduces
the weight of the vehicles, conserves fuel and
MPE (Metalplast Engineering)
reduces pollutant emissions.52
The company develops unique parts that
integrate plastic and metal.58 The company
serves customers in various industries, including
the automotive industry, with customized
solutions, from the planning and design phase
[Upper oil pan manufactured by Tadir-Gan]
to manufacturing and supply.59 The company
is a Tier 1 and 2 supplier for large automotive
Polyram
companies, such as BMW, Volkswagen, Peugeot,
Polyram develops, manufactures and distributes and others.60 It was founded in 1999 as a
plastic raw materials and thermoplastic subsidiary of two long-standing companies
compounds for various industries, including the – Shiran Engineering (founded in 1986) and
automotive industry.53 The company is a Tier 1 Rimoni Industries (founded in 1954).61 In 2015,
and 2 supplier for large automotive companies the group (Rimoni, Shiran, MPE and subsidiaries)
and suppliers54, including Opel and BMW.55 Its employed 345 people and had revenues of
plant was founded in 1986 by families that live NIS 112 million.62 The company manufactures
in Ram On, an agricultural village. In 2015, 65% high-quality precision plastic components,
of the company’s shares were acquired by FIMI using sophisticated injection technology
Investment Fund. and advanced manufacturing processes. The
As of 2015, the plant employs 159 workers. In manufacturing process includes product
2014, company revenue was NIS 416 million injection, plastic products that incorporate metal
and net profits totaled NIS 41 million. 56
parts, printing on the product itself, and products
22 | THE AUTOMOTIVE INDUSTRY IN ISRAELconsisting of multiple injected components.63 competed against 35,000 companies around
The company's development team and engineers the world and won the Excellent Supplier award
often participate in advanced research, in order from Bosch, the giant German corporation.70
to implement new, cutting-edge technologies
for the company's products.64
[Front cover manufactured by Omen Casting Group]
Omen Casting Group Spectronix
The company manufactures and supplies parts Spectronix develops and markets innovative
made of aluminum and brass alloys using high products for flame and gas detection for
pressure die casting technologies, primarily for civilian and military customers. Its products
the automotive industry. The company develops include industrial flame, gas and fuel fume
multiple products, including components for detection systems for civilian facilities (e.g.,
gears, engines, steering systems and braking factories) and vehicles, as well as explosion
systems. The company is a Tier 1 and 2 supplier
65 suppression systems for military vehicles.71
for large companies such as Mercedes, Fiat, The company's primary military customers
Volkswagen, Jaguar and more.66 The plant was are AMEREX, distribution companies, large
founded in 1946 in Kibbutz Hatzor and began manufacturers of armored fighting vehicles
to manufacture for the automotive industry (AFVs), and the defense ministries and armies
in 1997. In 2006, 28% of company holdings of various countries worldwide. Most trade
were acquired by the Tene Investment Fund. relations between the group and its customers
Later, manufacturing plants were established are longterm ones.72 The company was founded
in Portugal, Russia and North America.67 As in 1967 and began to supply fire detection
of 2014, the company employs 238 workers. and extinguishing systems for IDF military
Revenue in 2013 was NIS 154.7 million.68 The vehicles in 1974. It went public in 1982, and
company supplies customized products, from in 1992 it began to manufacture systems for
the development phase to production. It uses the civil industry as well. In 2008, the company
advanced technologies to supply products with started to supply systems for foreign militaries
complex designs, which are tailored specifically (NATO, US). In 2015 it was acquired by the
for the customer’s needs. 69
The company Emerson corporation, which committed to
23SELECTED ISRAELI COMPANIES
continue employing at least 159 employees is called EyeQ and it can detect whether the
at the Spectronix factory in Sderot, for 12 years driver is inside the lane or has swerved, assess
after signing the agreement. 73
In 2014 the the distance between the car and the one in
company employed 183 employees. In 2014,
74
front of it (triggering an alert if the vehicles are
the company’s revenue from military sales was too close), and more.77 Large companies, such
approximately $10.3 million.75 The company as Volvo, BMW, General Motors, Hyundai, and
develops advanced products with innovative others, have chosen to integrate this technology
features for the unique niche of military-use into their vehicles, and systems are sold to the
vehicles. The products must meet high standards, secondary market as well.78 The company was
which vary from one military organization or founded in 1999, and in 2014 it completed the
country to another. In addition, the company
largest stock market offering in Israeli history
is constantly developing new products. One
until that time, valued at $5.3 billion.79 In 2015,
example is a series of containers for rapid
the company employed 542 people and had
dispersal of fire-extinguishing powder, which
revenues of $241 million.80 Mobileye’s concept
are operated by a gas propellant/generator used
of integrated hardware and software systems
to extinguish fuel fires in seconds.76
is an innovative concept in the automotive
market. The company won several prestigious
Advanced technologies – international awards, including the International
electronics, software, Fleet Safety Award 2011, Red Herring Top
innovation, and driver- 100 Innovators, and Frost & Sullivan 2006
Entrepreneurial Company of the Year in the
assistance systems automotive category.81
Mobileye
Mobileye develops and manufactures advanced
driver assistance aftermarket products for
vehicles, such as road collision prevention
systems that are based on cameras with artificial
visual capabilities. The company's product Mobileye accident prevention system
24 | THE AUTOMOTIVE INDUSTRY IN ISRAELiFLYTEK company).83 VocalZoom was founded in
2009. In 2010, it began to operate from the Iris
VocalZoom incubator run by Maayan Ventures, and between
The company develops an electro-optic 2012 and 2014, the company raised additional
microphone designed to improve voice investments from large corporations such as
recognition in devices, in order to support 3M.84 As of 2014, the company employs 15
voice control in noisy environments. This people.85 In its most recent funding round, the
technology has several purposes, one of the company raised $7.3 million, and it is currently
most important of which is to enable a driver to valued at approximately NIS 62 million.86 The
give voice commands while driving a vehicle.82 company is working with chip manufacturers
VocalZoom’s development measures vibrations for Audi and with auto manufacturers in order
on the speaker's facial skin at a precision rate to develop the interface.87
of hundreds of nanometers, using safe laser
rays. The system analyzes these vibrations
and generates data about speech timing and
frequency, while distinguishing between the
voice of the speaker and background noises.
The optic microphone improves performance
of the voice recognition engine in the vehicle,
and supports features such as navigation, a
calendar, contact person searches, and more.
The information from the sensor is combined VocalZoom microphone noise filtering technology allows the
system to focus on the driver's voice.
with information from the microphone, and it
neutralizes background noises in order to obtain
identification rates of 80%-90% accuracy.
The system is located on the rear-view mirror
Argus Cyber Security
in the vehicle or on the dashboard (in cases
where there is cooperation with the auto The company helps vehicle manufacturers and
manufacturer). VocalZoom markets its product secondary suppliers of intervehicle connectivity
to the secondary market and to other companies devices to protect connected vehicles from
that manufacture speakers and similar products infiltration. Information security is critical for
for the secondary market (e.g., the Chinese modern vehicles, which use over 50 different
25SELECTED ISRAELI COMPANIES
computers to control their systems. There are
currently no mechanical operations in a vehicle
that are not controlled or monitored by software.
In addition, the number of possibilities for a
vehicle to communicate with external devices
Guardian Optical Technologies
(e.g., smartphones), Internet, infrastructure and
other vehicles is constantly growing. These are The company develops tiny precision sensor
all potential breach points that carry the risk systems designed for installation in the vehicle.
These systems can intelligently identify people
of external parties taking control of the car or
in the vehicle for several purposes: to send an
using it contrary to the driver's intentions.88 The
alert if a child is left alone in the vehicle, to
company develops products for automobile
send an alert in case of a break-in, intelligent
manufacturers (OEMs) and Tier 1 suppliers, as
activation of airbags in case of a car accident,
well as for component manufacturers for the
etc.93 The company has signed its first deals
secondary market. One of the largest investors
with Tier 1 suppliers, including Delphi, Bosch,
in the company is Magna International, a
JCI and others.94 The company was founded
Canadian corporation that is the second-largest
in 201495, and is a startup with less than 10
secondary Tier 1 supplier for the automotive employees.96 By the end of 2016, the company
industry in the world and the largest in North is expected to sell approximately 100,000
America. The company was founded in 2013
89
units to Tier 1 suppliers, in deals valued at
and completed its first round of investments $1.5 million.97 The sensors developed by the
in 2014. Its development center is located in company are designed to replace the pressure
Israel, and the company has additional offices sensors in the seats, seatbelt sensors, and
in the US, Germany and Japan. As of 2015,
90
standard driving cameras, as these sensors can
the company employs 20 people.91 During that detect the location, physical size and position
same year, the company raised $26 million in of each passenger in the vehicle. The optic
investments from Magna International and sensors developed by the company are based on
other investors.92 patent-protected technology, which detects the
presence of a person even without a direct line
of vision. The depth sensors identify movement
of objects, and a special algorithm classifies
movements that are typical of human beings,
26 | THE AUTOMOTIVE INDUSTRY IN ISRAELanimals and other objects. The sensor detects After its acquisition by Herman, the company is
even the slightest movement, and can therefore expected to continue to act as an independent
detect babies left in the vehicle with extremely division within the Herman Corporation. From
high accuracy rates. 98
its initial investments until its sale for $200
million, Redbend received $35-$40 million in
investment financing.102
Redbend
Redbend is a leader in the management of
MobiWize
firmware, applications and software for mobile
devices, connected devices and automotive The company’s software product generates
systems. The company enables efficient information for automotive systems based
management of over-the-air software updates on road conditions, in order to help conserve
for automotive entertainment and information fuel and offer other potential benefits.103 Its
systems, while guaranteeing the protection software uses data collected from various
and reliability of critical systems. 99 The sources, including crowd sourcing, sensors,
company provides holistic, secure management vehicle computers, special driver-vehicle-road
capabilities for software-based automotive layers, and more. The mapping system offers
systems, as well as for automakers (OEMs) and a wide range of opportunities for streamlining
Tier 1 suppliers. 100
Redbend was founded in automotive systems and fuel consumption,
1999, and in 2001 the company changed its improving driving performance, reporting excess
business focus and began to develop software weight on trucks, reducing pollutant emissions,
for the remote management of mobile devices increasing driving safety, and many other
such as tablets and smartphones. In 2010, possibilities.104 The company was founded in
the company expanded its business to the 2011 and employs 25–50 people.105 It markets
automotive industry. In 2015, Redbend was its product to the secondary market – both to
acquired by Herman, a US corporation that private vehicle owners and to fleet managers.106
manufactures entertainment and information
systems for vehicles.101 As of 2015, the company
employed 240 employees, mostly in Israel.
27SELECTED ISRAELI COMPANIES
Smart transportation can then be transferred to control centers for
various purposes, including traffic management,
research, traffic light operations, time-to-
destination analyses, and more. This unique
location system is capable of monitoring all
Waze significant incidents on the road within minutes,
The company has developed one of the most and of providing information that is equivalent
popular navigation applications in the world. to high-density installation of sensors on the
The application is supported by smartphones, road. The information is provided to the driver
tablets and vehicle systems, and enables drivers in text format, a voice message and an accurate
to navigate the roads while receiving updates on map. The company employs 15-20 people.108
traffic congestion, traffic police, road accidents,
and more. This information is collected by other
application users who input information. The
company was founded in 2009, and over the Hi Park
course of several years it raised $67 million
The company was founded in 2013 and has
from various funds and investors. Waze was
developed a community application for mobile
acquired by Google in 2013 for $1.1 billion.107
phones (operated by placing the phone in the
car windshield) that detects and maps available
parking spaces while driving. This innovative
application identifies available parking spaces
Cellint via a camera, cross-checks the information
The company was founded in 2004 and with prior mapping data in order to determine
provides information on traffic congestion, using whether the parking space is legal, and uploads
information collected from anonymous mobile the information to a central database that can
phones. The company's unique, patent-protected be accessed by additional users. This application
location system anonymously monitors all can save time and hassle for its users, while
active mobile phones and detects their exact they search for a space to park on city streets.
location on the road or on a street once every As of 2014, the company employed 8 people.
30 seconds, on average. This information is The application was tested by taxi drivers in
analyzed using big data processing methods, and Tel Aviv and will soon be publicly available.109
28 | THE AUTOMOTIVE INDUSTRY IN ISRAEL29
FOOTNOTES
1 ZEW, an independent, non-profit economic research center 26 Online Automotive News magazine, August 2015.
in Germany.
27 Jerusalem Post, January 2016.
2 United States Department of Labor.
28 Interview with Uri Pachter, Director of the International
3 ZEW, an independent, non-profit economic research center in Projects Department at the Export Institute, February 2016;
Germany; Houston Chronicle; Document published in 2010 Trade agreements from the Ministry of Economy website.
by the US International Trade Administration, page 6.
29 Review of Israel's automotive industry (2015), Israel Export
4 Israel Export Institute review of the Israeli automotive Institute.
industry, 2015.
30 Company presentation for the capital market.
5 McKinsey report on the global automotive industry – The
Road to 2020 and Beyond, page 3. 31 Company website; Article in The Marker, August 2014.
6 OECD review of the global automotive industry, 2013, page 7. 32 Article in The Marker, May 2015.
7 Website of the International Organization of Motor Vehicle 33 Company financial report for the third quarter of 2015, page 8.
Manufacturers (OICA). 34 Company presentation for the capital market.
8 http://www.oica.net/category/production-statistics/2015- 35 Review of Israel's automotive industry (2015), Israel Export
statistics/
Institute.
9 http://www.strategyand.pwc.com/perspectives/2016-auto-
36 Article in Calcalist, April 2011; Appeared in Bizportal, May
industry-trends; http://www.eulerhermes.com/mediacenter/
2015.
Lists/mediacenter-documents/Automotive-Global-Report.pdf
37 Article in Calcalist, April 2011.
10 Analysis of trends in the automotive industry from OECD-
Observer; Euro6 standards from the website of the European 38 Article in The Marker, December 2013.
Commission; CAFE standard from the US National Highway
Traffic Safety Administration (NHTSA). 39 Company website.
11 Publication by the US Energy Administration. 40 Company website.
12 McKinsey report on reducing vehicle weight. 41 Globes ranking website.
13 Published in MotorTrend, an online automotive magazine. 42 Review of Israel's automotive industry (2015), Israel Export
Institute.
14 Published on the Avent website; Published on the EU website.
43 Packer Steel website (former company owner).
15 Published on the Digital Trends website and on the US
government website. 44 Review of Israel's automotive industry (2015), Israel Export
Institute.
16 Various publications on the Security Innovation website.
45 Review of Israel's automotive industry (2015), Israel Export
17 Published on the Mordor Intelligence website. Institute; Company website.
18 YNET, November 2013. 46 Company website.
19 Publication on the Israeli Innovation Institute website. 47 Calcalist, September 2015.
20 Published on the Tel Aviv University website in October 2014. 48 Calcalist, July 2015.
21 Online pamphlet published by the Israel Fuel Choices Initiative 49 Company website.
Administration of the Prime Minister's Office; Times of Israel,
February 2015. 50 Company website.
22 Online pamphlet published by the Israel Fuel Choices Initiative 51 Review of Israel's automotive industry (2015), Israel Export
Administration of the Prime Minister's Office. Institute.
23 Jerusalem Post, September 2015. 52 Company presentation for the capital market, December 2014.
24 Times of Israel, February 2015. 53 Company website; Article in Calcalist, April 2015.
25 Online New Tech magazine, February 2016. 54 Export Institute website.
30 | THE AUTOMOTIVE INDUSTRY IN ISRAEL55 Publication in Bizportal. 85 Maayan Ventures financial report for 2014, page 29.
56 Article in Calcalist, April 2015. 86 Maayan Ventures financial report for 2014, page 21, 23.
57 Company website. 87 Maayan Ventures financial report for 2014, page 28; Chiportal
website, April 2015.
58 Review of Israel's automotive industry (2015), Israel Export
Institute. 88 Company website; Review of Israel's automotive industry
(2015), Israel Export Institute; Article in Walla, March 2015.
59 Company profile on EPICOS.
89 Company website; Article in The Marker, September 2015.
60 Company profile at the Export Institute.
90 Company website; Article in The Marker, September 2015.
61 Company website.
91 Article in Walla, March 2015.
62 Rimoni Industries report for 2012.
92 Article in The Marker, September 2015.
63 Rimoni Industries report for 2012.
93 Company website; Review of Israel's automotive industry
64 Company website. (2015), Israel Export Institute; Publication on the Ministry of
65 Review of Israel's automotive industry (2015), Israel Export Economy website, May 2015.
Institute; Article in Calcalist, August 2014. 94 Company presentation.
66 Article in Calcalist, August 2014. 95 Company LinkedIn profile.
67 Company website. 96 Company LinkedIn profile.
68 Article in Calcalist, August 2014. 97 Company presentation.
69 Company profile at the Export Institute. 98 Company LinkedIn profile.
70 Article in NRG, August 2015. 99 Review of Israel's automotive industry (2015), Israel Export
71 2014 annual report, page 4; Appeared in Chiportal, June 2015. Institute.
72 2014 annual report, pages 37-38. 100 Company website.
73 Appeared in Chiportal, June 2015; OS-Capital website, 101 Article in Globes, January 2015.
November 2010; ListofCompanies website. 102 Article in Globes, January 2015.
74 2014 annual report. 103 Review of Israel's automotive industry (2015), Israel Export
75 2014 annual report, page 39. Institute.
76 2014 annual report, page 36. 104 Company website; Document by the Export Institute on smart
transportation; company website page.
77 Company website; Review of Israel's automotive industry
(2015), Israel Export Institute. 105 Company LinkedIn profile.
78 Company website. 106 Company website.
79 Article in The Marker, August 2014. 107 Article in Globes, June 2013; Article in Globes, March 2016.
80 Mobileye 2015 annual report. 108 Article in YNET, February 2011; Information about the
company from the website of the Innovation Conference for
81 Company website. Smart Cities held in The Hague in February 2016; Company
LinkedIn profile.
82 Company website; Review of Israel's automotive industry
(2015), Israel Export Institute; Article in The Marker, 109 Article in Globes, July 2015; Article in Calcalist, September
November 2012. 2014; The Car online magazine, April 2015.
83 Company website; Report by the venture capital fund that
operates the incubator for the Israel Securities Authority.
84 Maayan Ventures financial report for 2014, page 27; ; Article
in The Marker, November 2012.
31The Foreign Investments and Industrial Cooperation Authority Phone: +9722-6662410 Email: InvestInIsrael@economy.gov.il The information included in this guide is relevant for December 2016. The content included is intended to provide only a general outline of the subjects covered and it is necessary that specific professional advice be sought before any action is taken. 32 | THE AUTOMOTIVE INDUSTRY IN ISRAEL
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