For Immediate Release

Pointer Telocation Announces Raising $4,675,000 from Israeli Investors in a Private Placement

Givatayim, Israel December 28, 2006, Pointer Telocation Ltd. (Nasdaq Capital Market: PNTR), a leading provider of services to insurance companies and car owners, including road-side assistance, towing and stolen vehicle retrieval services in Israel, Argentina and Mexico, today announced it is raising $4,675,000 from Israeli institutional investors by means of a private issuance of 425,000 ordinary shares at a price per share of $11. The investors in the private placement will also be issued warrants to purchase 212,500 ordinary shares of the company, such that for each one share purchased the investors shall be entitled to a warrant to purchase half a share. The warrants will be exercisable into ordinary shares of the company, at an exercise price per share of $13 and will be exercisable for a period of four years.

The issuance of the shares and the warrants is subject to regulatory approvals.

Yossi Ben Shalom, Chairman of the Board of Directors, commented “The capital raised through the private placement will allow Pointer to implement its growth strategy through acquisitions and broadening the company’s lines of services as was published last week.”

About Pointer Telocation: Pointer Telocation Ltd www.pointer.com provides range of services to insurance companies and automobile owners, including road-side assistance, vehicle towing, stolen vehicle retrieval, fleet management and other value added services. Pointer Telocation provides services, for the most part, in Israel, through its subsidiary Shagrir and in Argentina and Mexico through its local subsidiaries. Independent operators provide similar services in Russia and Venezuela utilizing Pointer’s technology and operational know-how.

Safe Harbor Statement

This press release contains forward-looking statements with respect to the business, financial condition and results of operations of Pointer and its affiliates. These forward-looking statements are based on the current expectations of the management of Pointer, only, and are subject to risk and uncertainties relating to changes in technology and market requirements, the company’s concentration on one industry in limited territories, decline in demand for the company’s products and those of its affiliates, inability to timely develop and introduce new technologies, products and applications, and loss of market share and pressure on pricing resulting from competition, which could cause the actual results or performance of the company to differ materially from those contemplated in such forward-looking statements. Pointer undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For a more detailed description of the risks and uncertainties affecting the company, reference is made to the company’s reports filed from time to time with the Securities and Exchange Commission.