Carasso Locks In Chery Import Continuity Through 2030

The Ministry of Transport has granted Carasso Motors a direct-importer license for Chery M1 vehicles through June 7, 2030, removing a near-term expiry risk from the brand that now carries most of the group's vehicle deliveries. Chery supplied 10,426 of the 17,996 vehicles sold by the group in the first quarter, almost 58% of the total and roughly 73% of the year-on-year increase. The license had previously run only through July 31, 2026, even though Carasso renewed its commercial franchise with Chery for five years in April 2025. The new approval lets the company plan procurement, model launches, marketing and service over several years without a nearby regulatory deadline hanging over its largest brand. It does not, however, create demand or guarantee profit: group revenue rose 35% in the first quarter, while gross margin fell from 18% to 16%, operating margin declined from 12% to 9%, and net income was nearly unchanged. The focus now shifts from license expiry to the quality of Chery's sales, vehicle-segment margins and Carasso's ability to turn lower inventory into cash.

A Short Extension Becomes an Almost Four-Year Horizon

Carasso and Chery renewed their franchise agreement for five years on April 8, 2025. The commercial franchise and the direct-importer license issued by the Ministry of Transport are separate layers. One governs the relationship with the manufacturer, while the other permits the vehicles to be imported into Israel.

That gap remained open for more than a year. At the end of 2025, the license was valid only through April 30, 2026. The Competition Authority recommended a one-year extension in February 2026, but the ministry had not decided how long the renewal would run. Carasso's first-quarter filing later showed validity through July 31, still too short a horizon for a brand at the center of the group's sales. The July 16 approval changes that position by setting a fixed date of June 7, 2030.

This closes the exact regulatory issue identified in the previous analysis. The commercial franchise and the import permit now operate on broadly similar horizons, allowing Carasso to plan orders, homologation, spare-parts inventory and launches without relying on short extensions. The approval cannot prevent future changes in the manufacturer relationship or regulatory requirements, but it removes the immediate risk of the permit expiring while Chery continues to grow.

Chery Delivered Nearly Three Quarters of the Increase

The group sold 10,071 vehicles in the first quarter of 2025, including 4,666 Chery vehicles. A year later, total deliveries reached 17,996 and Chery alone contributed 10,426. Chery therefore added 5,760 vehicles out of the group's 7,925-vehicle increase. Other brands and activities also expanded, but the Chinese brand supplied about 73% of the incremental volume.

The dependence also appears in procurement. Chery represented 48% of the group's vehicle import cost in 2025, the largest disclosed share among its brands. The license date was therefore not a minor administrative matter. It affected the supplier behind a large portion of vehicle orders, inventory and Carasso's ability to maintain a competitive model range.

A longer permit supports more orderly procurement planning, but it does not eliminate the risk of relying heavily on one brand. Changes in demand, manufacturer pricing, exchange rates or shipping schedules can still affect sales and working capital. What has changed is that Israeli regulatory approval is no longer an immediate obstacle to continued imports.

Continuity Is Secured, Profitability Is Not

The delivery surge did not flow through fully to earnings. First-quarter group revenue rose to NIS 2.61 billion from NIS 1.93 billion, but net income remained around NIS 108 million. Gross margin fell by two percentage points and operating margin declined by three percentage points.

Carasso does not disclose separate Chery profitability, so the filing cannot establish whether the brand caused the compression or helped offset it. The evidence does show that the license removes a continuity risk, but it does not prove that incremental deliveries carry pricing and margins sufficient to justify the capital they consume.

Working capital remains part of that calculation. Inventory fell from NIS 4.17 billion at the end of 2025 to NIS 3.55 billion at the end of March, a decline of about NIS 618 million. Even so, operating cash flow was negative NIS 578 million as cash moved into receivables, the leasing fleet and supplier payments. A longer regulatory horizon may improve order planning, but it can also support larger procurement commitments. The economic proof will come only if Carasso sustains Chery deliveries without rebuilding inventory or further eroding margins.

Conclusion

Approval through June 2030 closes the most important open regulatory issue around Carasso's largest brand. It connects the renewed commercial franchise with a multi-year operating permit and lets the company plan Chery's activity without a nearby expiry date. With the brand supplying almost 58% of first-quarter deliveries, this is a material operating change rather than a routine administrative update.

The permit should not be credited with revenue or profit that has not yet been earned. The coming quarters need to combine strong deliveries with better vehicle margins, continued inventory reduction and recovering operating cash flow. If those indicators improve together, the approval will prove to be infrastructure that lets Carasso exploit Chery's strength. If volumes keep rising while margins and cash remain weak, the license will secure continuity without improving the economics.