Maduro Now Set To Regulate Car (???) Sales

December 2, 2013

chery

President Maduro announced today that his war on inflation, prices and commerce will move over today…to cars. Yeap! For those of you that have been looking for a car to buy (or used for that matter) for the last two years and have not found one, you can rejoice, as, as of tomorrow, that non-existing car will actually go down in price, in another milestone for the revolution.

Maybe he should lower the price of toilet paper, while he is at it.

The story of the automotive sector is the same as that of most sectors of the the Venezuelan economy. The Government begins to squeeze out the private sector, destroying manufacturing capacity for the sake of socialism , favoring imports, particularly Government imports. The private sector gets fewer and fewer dollars and the Government gives out favors, charges commissions and uses the cars for political purposes. Of course, it is all sold as a big favor to the middle class, who supposedly will benefit from it. Maybe , like in the picture above, it will be the military middle class that gets the cheaper cars.

Car sales in Venezuela are down sharply in 2013. Total sales the first nine months of the year, according to Veneconomy were down 17.5% at 81,950 cars, but more importantly, sales of cars made in Venezuela were down 31.1% at 57, 236 units in the first nine months. For comparison, in 2007, car sales were 491,000, of which close to 200,000 were locally made.

Car makers in Venezuela are owed US$ 1. 8 billion today and find the flow of foreign currency spotty. Last June they had a big burst of  Cadivi payments, which by now have disappeared.

Meanwhile, cars imported by the Government are increasing. Veneconomy reports that while SEAT and Honda have not been given licenses to import cars for six years, independent importers related to the Government have been give licenses to import Chinese cars from distributors which are not even China based. They expect that 30,000 such cars will be imported this year. I wrote about some of these imports a couple of months ago.

Then there are the four car assembly projects which involve the Venezuelan Government, including the Chery project, which claims to be making 18,000 cars a year and will expand in the nationalized plant of another Chinese company called Great Wall. The other projects, including Venirauto, are seldom heard about. But are reportedly making some cars.

But the smoke and mirrors continue. The Government announced with great fanfare the Productive Venezuelan Automotive System, sort of like Gran Mision Vivienda for cars, and close to 400,000 people registered for it. About 3,800 people have so far received a car so far.

And today will be the crowning glory, as Maduro regulates car sales and sets car prices to go down. If you can ever find one.

Fortunately, as reported in Fausta’s blog, we have enough ambulances that they can be used for other purposes, such as electoral campaigns:

BaGHApnCUAAPULt

Maybe they should sell ambulances to the public.

You have to love socialism.

34 Responses to “Maduro Now Set To Regulate Car (???) Sales”

  1. sapitosetty Says:

    I heard over the weekend that the ambulances in a small city in Aragua are rarely available for emergencies because the nurses find it more profitable to use them as taxis. I also took a taxi that had a broken shock absorber and was rattling away, but the driver couldn’t afford the 2,800 BsF (1 month at minimum wage) for a new shock plus installation. The good news is he was able to rattle along at a low speed, which was probably safer.

  2. Ronaldo Says:

    Cuba is the target economic model for Maduro’s socialism. Venezuela will now have no cars for sale but at low prices. Just like Cuba!

    • m_astera Says:

      Along with televisions, computers, and appliances at low prices, but none available.

      On Avenida Bolivar in Porlamar is a brand-new Ford showroom completed a couple of years ago. it has yet to open and never seen a single car. But I’m sure, now, the prices will be low.

  3. Ira Says:

    On the bright side, in 30 years, Venezuela is going to be a goldmine of antique cars like 2002 Honda Civics.


  4. Finally Maduro is doing what his cherished mentor never had the balls to do. Follow on Velasco´s path in the late 60 in my dear Peru. Of course by 1990 we were so very poor – only Haiti was poorer -, Shining Path was ready to take over and inflation was 1000% a month at its peak. The big traitors was not Velasco but the army that diligently followed him up. Same a my beloved Venezuela.

  5. Canadian Says:

    Has this bus driver driven a car lately?

    • Kepler Says:

      I am not sure he ever was a bus driver. He was a “union leader” of bus drivers, infiltrated by the extreme left. That’s another thing.

  6. Ira Says:

    Even pre-Chavez, I never understood why hard goods were so expensive is VZ. In 1988 and 1989, I used to visit with a dozen cheap Casio watches, and my brother-in-law would sell them for two, three times the price.

    After I got married, for a few years in a row, he would visit us prior to the Xmas holidays (we lived in NYC then), and I would take him to a wholesaler to buy lights, ornaments, etc., which he would resell in VZ. Even if he bought RETAIL here, he was still able to sell them at such a markup as to pay for his trip, as well as a nice profit. (I think he bribed customs coming into Maquetia.)

    Was it because of huge duties, and why? Was this a major revenue source for the govt., compared to all that oil?

  7. JJ Says:

    I live in Miami. My neighbor who is not Chavista but enchufado just did the following: he bought a 40ft container of decomisado LG flat screens for half a million bucks. The original owner, sensing trouble ahead, sold the container at cost to the relevant authorities. My neighbor already has the product colocado but is waiting a few weeks for things to cool down. My neighbor says he’s making a killing and the current environment is actually great for business. I think the middlemen in this whole deal is GN.

  8. Derek & The Dominos Says:

    Useless Facts: The State of Texas pumped 2.7 million barrels of crude per day during September. That’s a lot more than Venezuela. A shout out to the Oil Warrior Dan Burnett.

  9. Derek & The Dominos Says:

    Texas doubled its oil production in three years beginning 2011. Venezuela has stayed at same level of 2.489 in same period. Why is it so difficult to raise production in Venezuela? It seems they don’t really want to.

    • syd Says:

      questions/observation:
      1. increased production in Tx: due to fracking?
      2. by not being part of OPEC, can the US under-price its product for greater sales?
      3. besides being hampered by OPEC quotas that control across-the-board pricing among members, Vz is also affected by ageing and poorly maintained infrastructure, to say nothing of inefficiencies due to a substantial loss in a whole layer of capable professionals, that were mostly snapped up by the Canadian oil industry, in 2002.

  10. Dave Hill Says:

    It should read “strangulate” car sales, not regulate. This dumb Marxist crap has always been a failure. Younger generations who can’t remember the past have to repeat it. It took the Russians 70 years to wake up.

  11. VJ Says:

    Por que los automoviles son costosos en Venezuela?
    (Tomado de Noticiero Digital)
    No se pueden comparar precios entre un país y otro sin analizar la estructura de impuestos y de costos.
    En Venezuela los impuestos a carros importados ensamblados es de 40%:
    http://www.seniat.gob.ve/portal/page/portal/MANEJADOR_CONTENIDO_SENIAT/05MENU_HORIZONTAL/5.1ASISTENCIA_CONTRIBUYENTE/5.1.4INFORMACION_INTERE/5.1.4.9IMPORTACION_VEHICU/IMPORTACION_VEHICULOS_02_REGIMEN_ORDINARIO.pdf
    Cita:
    Los vehículos importados bajo éste régimen causarán el impuesto establecido en el Arancel de Aduanas Venezolano, (40% Ad-Valorem), más el 1% de la tasa aduanera correspondiente, ambas tarifas aplicadas sobre el valor en aduana (Base CIF: costo, seguro y flete).
    Asimismo, estará sujeto al pago del Impuesto al Valor Agregado (IVA), y estarán gravadas con una alícuota adicional del (10%) sobre la base imponible, aquellos vehículos cuyo valor en aduana sean superiores al equivalente a U.S.$ 30.000 de los Estados Unidos de América, éste monto corresponde al Consumo Suntuario establecido en la Ley del IVA.
    Y como dice el texto ese 40% es sobre el valor CIF, es decir que al precio le tienes que sumar el flete y seguro y a todo eso le sacas el 40% y se lo sumas.
    Adicionalmente hay un impuesto EXTRA/ADICIONAL de 10% si el carro cuesta mas de $30.000 que son carros de medio y alto rango como camionetas medianas a grandes. Es decir, en este caso el impuesto es 50% sobre el precio CIF.
    Es decir, para el ejemplo de una Toyota 4Runner de $31.000 estaríamos hablando de $51.661 cuando le sumas el 1% de impuesto aduanal mas IVA.
    Los pocos carros que se medio ensamblan en el país, aplican impuestos a TODAS las piezas que comprenden el CKD, ese impuesto oscila entre 15% y 45% dependiendo si la pieza se produce en el país o no.
    0Algunas piezas se producen y son mas caras que las importadas, además de ser una kagada en cuanto a la calidad y durabilidad. Ej, los tubos de escape. Son tan malos que se oxidan/pudren saliendo de la planta.
    Pero como hay legislación que obliga a usar cierto componente nacional, entonces hay que usarlos. Quien se jode ?, el consumidor…
    Por último están los costos administrativos de lidiar con todos los entes gubernamentales incluyendo a CADIVI y SENIAT. Nada mas el costo financiero de tener que financiar la compra de dolares por 6 meses o mas ya que CADIVI no entrega dólares es un costo importante que se le suma al precio final. Ahh, y si es que entregan dolares porque generalmente no lo hacen…
    Eso sin nombrar los costos por chanchullos y robos que sufren TODAS las ensambladoras.
    Sumenle a todo esto el costo de distribución y la ganancia del concecionario y tendrán la razón porque los carros cuestan tanto en Venezuela. Si es cierto que hay algunos consecionarios que han especulado, pero es el mismo des-gobierno con sus políticas basuras la que estimula todo esto al hacer todo hiper-complicado y engorroso.

    • CARLOS Says:

      QUOTE
      Es decir, para el ejemplo de una Toyota 4Runner de $31.000 estaríamos hablando de $51.661 cuando le sumas el 1% de impuesto aduanal mas IVA:
      UNQUOTE

      Not at all, nada que ver,
      Duties and taxes are certainly 40% ADVAL +10% LUXURY + 12% IVA + 1% Seniat/Tasa but…very important..calculated at 6.3 Bs. per US$.
      So..the 4 Runner valued 31000 US$ will pay near 135.000 BsF (or 2000 real US$ at 65 Bs per US$)

      Now, if you import the 4Runner using your own foreign currency you pay 31000 FOB + 2000 freight/Insurance, ie 33.000 US$.
      Plus 135,000 Bs or 2000 green US$ in taxes, ie 35.000 US$… not so expensive and far from the 51000 $ manipulated by Noticiero Digital

      • VJ Says:

        Happens that you are using two different exchange rates to make the calculation: the official rate 6,30 to buy the car and the black market rate (65) to pay taxes and other expenses. Unless you are a chavista-enchufado nobody in Venezuela gets dollars @ 6.30 Bs to buy a car.
        So, if you make the calculations using “only” the official rate of 6,30 per US$, you will get a price close to US$ 51,000.

        • wanley Says:

          The car and freight are paid in dollars, so it does not matter what the exchange rate is. The taxes are calculated in dollars and paid in bolivares at the official rate. So the calculations are correct, the car will cost you 35.000 REAL DOLLARS.

  12. Glenn Says:

    Miquel off topic question. Venezuela is going to start issuing dollar denominated bonds to individuals, payable in bolivares I assume at 6.3 or whatever the new devalued rate would be. Who would buy these? Thanks

  13. César Says:

    Just read that PSA (Peugeot Citroën Group) is planning to build an assembly plant in Venezuela:

    http://www.lapatilla.com/site/2013/12/04/peugeot-producira-15-mil-carros-al-ano-en-venezuela/

    I wonder if it’s related to PSA’s move to end business relations with Iran Khodro, which builds Peugeot products in Iran. What I mean is that the announced future Peugeot plant could be just a transplant of some the Iran Khodro assembly lines as some kind of political favor, or something. It would make more sense that way since there is plenty of PSA production capacity in Mercosur, so that seeking additional capacity in Venezuela would be unnecessary.

    http://www.thetruthaboutcars.com/2013/11/irans-imported-chevrolet-camaros-raise-questions-about-gms-dealings-with-psa-and-the-iranian-regime/

    http://www.thetruthaboutcars.com/2012/04/the-french-connection-gm-psa-deal-will-bring-iran-to-its-knees/

  14. Kepler Says:

    Miguel,
    Could you please send me some of the data about FONDEN to produce some charts with it?
    I want to improve the FONDEN article in Wikipedia.

    Thanks

  15. e-cig Says:

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    Would’nt it be cool if you could smoke where you prefer,
    when you desire. Electronic cigarettes are those cigarettes that are run through
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