What’s With Maduro’s Plan To Allow People To Import Cars?

December 15, 2013

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Just before the election and completely out of the blue, the Maduro Government announced that it would allow both individuals and companies to import one car during the next 12 months. The only conditions for this would be that you open an account in dollars in a Venezuelan bank (mostly Government owned ones) and that you can not sell the cars for 36 months. Up to now, there has been no information on whether there will be limitations on what type of car you can bring. You simply have to bring your bucks, deposit them and pay all of the taxes, which will be in Bolivars at the official rate of exchange, i.e. they will be not be that large if you have greenbacks abroad.

The strange thing is that nobody asked for this, nor suggested it, it came as so many Chavista decisions are made, they decided to do it and announced it.

So, what gives? I have seen nobody to attempt to explain this decision, a sort of market friendly decision, very un-Chavista-like.

My theory is that the Government realizes that with the lack of foreign currency right now, the automotive sector is one in which it simply does not have the money to satisfy demand. After two years of 100,000 cars sold per year, in a market of at least 200,000 per year if no more, there was simply no way the Government would spend another billion and a half per year to satisfy demand. At the same time, not satisfying demand, continued to drive prices higher, cars are scarce and importing chimbo Chinese cars was not working, you still have go pay for them. And it was a huge racket anyway.

Enter a market friendly, screw the private sector solution: Let those that have savings in foreign currency bring the dollars and the cars. That way, have the wealthy finance the supply of cars, partially helping to solve the problem. At the same time, it would also ease the pressure on the Government to give foreign currency to local car manufacturers to build cars or import cars, bypassing the private sector and reducing their profits.

If implemented correctly, the plan will work. Many companies and individuals with foreign currency abroad will take advantage of this window of opportunity to solve their car problems. Others will simply take advantage of it to change the model they drive, the used car hitting the market. Others will turn this into a business, bringing cars under the name of everyone in their family and selling them via a private document without transferring the car until the 36 months are up. In fact, it has even been suggested that there could be a Sicad auction for importing cars, in which case you know someone will make a lot of money with this new policy by the Government.

A good pragmatic solution to a problem, even if for the wrong reasons.

29 Responses to “What’s With Maduro’s Plan To Allow People To Import Cars?”

  1. geronl Says:

    Does his price control policy apply to these imported cars/

  2. moctavio Says:

    Well, you can not sell them formally for three years.

  3. sapito del monte Says:

    Cars sounds like good business for South Florida. On another topic, wanna share with your readers how the CIA’s ‘Illicit Finance Group’ unit (produces reports on subjects like money laundering and international corruption) collected its Venezuela information circa 2006. Esta vaina es de pelicula.

  4. sapito del monte Says:

    It’s all here:

    http://www.nytimes.com/2013/12/14/world/middleeast/a-disappearing-american-spy-and-the-cia.html?

    Basically, the CIA was outsourcing it’s Venezuela intelligence to retired FBI agent Robert Levinson. Levinson was 8 years retired from the FBI living in Broward County. Levinson worked for the FBI in Miami tracking Russian mobsters. Just how he became the CIA’s go to guy on Venezuela beats me but the article says his reports where questioned by superiors once the shit hit the fan.

  5. sapito del monte Says:

    The CIA did not have in 2006 the financial transaction monitoring capability it has today. But to make matters worse, que carajo sabia Levinson de Venezuela? NADA

  6. sapito del monte Says:

    Thus the outcome, the CIA IFG unit was terminated.

  7. sapito del monte Says:

    CIA entrance exam

  8. Morpheous Says:

    This can certainly bring down inflationary pressures of auto prices only. But I don’t thing it will bring down demand for dollars. People will want to protect their net-worth against inflation and devaluation. If they import cars using their dollars, they will have more spared bolivars that will put pressure on both inflation and parallel rate. Certainly, the government would be able to use less dollars for importing cars and inputs for the local auto industry. But I do not think they will use this to ease pressure in the parallel market. Those dollars would simply be used in corruption, political allies, mercosur related companies (e.g., Gold Varig), …

    By the way, huge amount of dollars are paid without major restrictions to foreign companies via mercosur agreement… Good for them while venezuelans are asked to save in bolivars at 15% rate while inflation is 50% + .

  9. sapito del monte Says:

    The issues and problems in the NYT piece are known to me. The Intel community is insular. They hire and promote from within. The are leary of outsiders. Also the gaps between the intel agencies and the disruption to global intelligence efforts stemming from military ops in Iraq, Afghanistan. But they are comfortable snooping on those who know or may seem to know.

  10. Paul Esqueda Says:

    Crazy solutions to tough problems the Venezuelan Government created itself. It shows that is not about the science of economics, it is just cheap populism. A brainless Government since the tiny brain they had is now gone. Just by looking at how happy Venezuelans, that visit me from Caracas, are with CADIVI dollars this will be another blessing from revolution.

  11. sad Reality Says:

    If I had to guess, I’d say that most of the potential buyers will be people who can already get dollars at a preferential rate. I don’t foresee the average Venezuelan dumping what foreign currency they may have back into Venezuela. That being said, if there is a flood of cars the used market will likely plummet, unless there is a shortage on the horizon.

    I see this is as a no-gain plan for the country, only for the rich and/or corrupt.

  12. Kepler Says:

    In 12 months these bastards will be saying they discovered some capitalists are misusing this system and declare a further war on usury.
    Banana republic.
    The question is: why doesn’t the MUD says right now how this system is prone to fraud? I mean: it’s the same thing again like with CADIVI, albeit on a smaller scale: bloggers like you, Miguel, wrote about this from the very start, people just talked about it on the side, there were only the spare comments from economists about that, from commentators in articles in El Universal and that was it until the government decided to “discover” lots of people were committing fraud with CADIVI. It’s the same with anything the government implements and we can see to a big extent how the fraud is going to occur…

  13. Charlie Says:

    People in the Aporrea forum have asked that the government allows importing car on a couple of occasions. The last time was on Nov. 15. However, if you need to open an account in US$, The average Joe won’t be able to take advantage of this new scheme.

  14. moses Says:

    And will they ask were do these dollars come ? If for example you want to import a Chevrolet Cruze from US (which by the way is not exactly the same car as GM Venezuela is assembling) and you have $ 23500 available, will you bring them from outside Venezuela and expect “No Questions Asked ” ?

    Anther issue: If you bought those $ 23500 at at average of 40 Bs/ $ exchange rate, the car would cost $ 23500 x 4 = 940.000 Bs, with no taxes. Today this vehicle is priced around 523.155 Bsf. Break even exchange rates (no taxes and no transportation costs) would be 22,25 Bsf./ $

    See US Cruze MSRP prices here:

    http://www.chevrolet.com/cruze-compact-car/build-your-own.html

    See Cruze Prices in Venezuela:

    http://www.chevrolet.com.ve/precios.html

    • Milton Says:

      Moses, It is almost impossible to get the Cruze for 523.155 Bsf. Getting the Cruze for that price is as easy as getting USD at 6.3. Only the “enchufados” have access to it.

      • moses Says:

        The reason that you may not be able to get them at this price is due to demand outstripping supply. I think today they may be assembling 700 Cruzes per month; on the other hand, GMV is trying to assemble a less expensive model, the Aveo at a rate of 1000 a month (50 a day) but it is limited by CKD dollars and the dollars approved for their suppliers. They could easily assemble 2000 to 3000 a month …

        In 1978 around 180.000 cars were assembled locally per year

  15. Dave Hill Says:

    More economic brilliance from the Marxist think tank. Create a problem with stupidity, blame your enemies for everything, and then propose a brilliant solution that is doomed to fail. Then start the cycle over.

  16. Kepler Says:

    No hope: Borges said yesterday the government should NOT increase the price of petrol, just stop giving it away to Cuba. Either he is a complete ignorant or he is completely dishonest AND already too late and not knowledgeable of the fact people are moving to the idea an increase is necessary.


    • He is just playing the game. Of course it is necessary, but the opposition cannot miss the opportunity of making them pay politically for it. Let us face it both things should be done.

      At the same time it is rational to demand that, if they are going to eliminate subsides, they should start by eliminating the one that is not perceived by the Venezuelans.

  17. Island Canuck Says:

    Ok, I’m confused.
    In order to import a car from outside Venezuela you need to open an account in a PUBLIC (as I read it) bank in US$.
    Are you then supposed to pay for the car from this account?
    Doesn’t that seem a little illogical?

    Or is this another way for the government to obtain a list of Venezuelans who have money outside the country?
    Maybe tied to the CADIVI & SITME frauds or overcharging by business men.
    Or just to harass them later?

    I wouldn’t trust this government for 2 seconds with any foreign currency.

  18. TV Says:

    Won’t this drive the Voldemort rate up even more, as it will create even more demand for dollars? It will have other knock-on effects as well, more cars mean more pollution, more traffic and even more free gasoline to be dispensed around. There are a few benefits with this plan, but overall, seems like the downsides are pretty bad as well.


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  20. Alex Says:

    Miguel, as ISLAND CANUCK is asking, why the heck do they want you to open a usd account in Venezuela? To buy the car abroad, you have to pay for it abroad. They want you to pay for the car from the Venezuelan account? What for?

    • moctavio Says:

      The Government wants to control the import process and know the prices at every step, they will pay the card directly. That’s the plan anyway.

  21. Flash G. Says:

    Bob Levinson was the CIA’s go-to guy on Venezuela circa 2006:

    Miami Herald | EDITORIAL
    The Levinson deception

    OUR OPINION: Rogue CIA operation demands investigation by Congres

    Read more here: http://www.miamiherald.com/2013/12/15/3817100/the-levinson-deception.html#storylink=cpy

    The Lost Spy: Dissecting the CIA’s Biggest Scandal Since 9/11

    http://motherboard.vice.com/blog/the-cia-lost-spy-scandal

  22. Talking out of my ass Says:

    “La receta conspirativa aplicada por la CIA fracasó en Venezuela”

    recetas de conspiración emocional???

    http://www.correodelorinoco.gob.ve/politica/receta-conspirativa-aplicada-por-cia-fracaso-venezuela/

  23. VJ Says:

    These are the requirements to import cars and please notice the following:
    1- The entire procedure is to be executed by Suministros Venezolanos, C.A. (SUVINCA).
    2- According to the Gaceta Oficial No. 6117, the period to import cars ends on May 2nd, 2014. The decree is valid for just 6 months.
    3- The car price, taxes and other expenses are to be calculated in “moneda extranjera” and paid directly to Suvinca.

    07/12/2013 03:30:00 p.m. | Emen .
    – Ser persona natural residente de la República Bolivariana de Venezuela.
    -Copia de la cédula de identidad.
    -Copia del Registro de Información Fiscal (R.I.F.)
    -Certificación bancaria que acredite la existencia de una cuenta en moneda extranjera en cualquier Banco Público de Venezuela.
    -La aplicación solo es para vehículos nuevos cero (0) kilómetros de cualquier marca o modelo, siempre que cumpla con las normas de Transporte Terrestre del país.
    También tenga presente para importar:
    -Se otorgará un máximo de una licencia de importación por persona, para un vehículo; y una licencia de importación por persona, para una motocicleta.
    -El vehículo adquirido no podrá ser comercializado, cedido, ni traspasado en un período de tres (03) años, contados a partir de su ingreso al Territorio Nacional.
    Así el proceso de importación:
    La empresa estatal Suministros Venezolanos Industriales C.A. (Suvinca), dependiente del ministerio de Comercio, genera la oferta a la persona que solicita la importación del vehículo.
    -Se emite la aceptación por parte de la persona natural de la oferta presentada.
    -La persona natural realiza el pago en moneda extranjera correspondiente a la compra del vehículos. El pago debe incluir costo por el servicio realizado por Suvinca y los impuestos respectivos.
    -Suvinca ejecuta la importación del carro, lo cual incluye la nacionalización y “demás trámites legales”.
    -La estatal hace entrega a la persona natural del vehículo solicitado.

    http://www.elmundo.com.ve/noticias/economia/politicas-publicas/los-requisitos-para-importar-carros-y-motos-con-di.aspx

    http://www.mincomercio.gob.ve/gaceta_decreto_importacion

  24. Island Canuck Says:

    Wow, another HUGE corruption opportunity.
    Now we aren’t talking about Bs.20 for a bag of corn flour.
    Now it will be 10s of thousands of $$ for each car.

    They were also supposed to announce the price controls on the assembly plants already here in Venezuela.
    Haven’t seen any of that yet.

    Now they are also talking about controlling the prices of apartments & houses.
    Good luck with that.
    They’ve already destroyed the rental market for housing.


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