Venezuelan car production screeches to halt, used cars now cost more than new

[amadeus]

Read the full storyhere.

Venezuela used cars out-price new

At times, Venezuela is a place where the world seems to work in reverse. Take cars, for example.

The waiting list for a new car in Venezuela can last up to two years, so now every car that rolls out of a showroom immediately increases in value, making a used car more expensive than a new one.

"A year ago my car cost me 54,000 bolivars (around $25,115) and I can already sell it for over 65,000 ($30,230)," says a happy Hernando Camacho, who drives a Renault Clio.

Many Venezuelans view buying a car as a more secure investment than keeping their savings in a bank, where they can be eaten away by an inflation rate that hit 30.9% in 2008.

Making cars in Venezuela is not easy. In order to import new parts, you need a regular source of foreign currency, something which is tightly controlled by the government.

The Venezuelan Automobile Chamber of Commerce (Cavenez) warns that national car production could soon come to a near standstill.

Last year the government implemented several measures to stimulate the motor industry, limiting imports and promoting the sale of cars assembled in the country.

But Cavenez complains that union conflicts and long delays in getting dollars at the official exchange rate from the Commission for Currency Administration (Cadivi) is killing a sector whose sales of new cars dropped by 44.8% in 2008.

Since 2003, Venezuela has fixed a limit on the amount of foreign currency that people and companies can have at the official exchange of 2.15 bolivars to the dollar. This year the government has progressively reduced these allowances in "non priority sectors".

Good thing they stayed away from those evil IMF guys! Good luck saving money to buy a car when there's 30% inflation, a two-year waitlist and restrictions on owning foreign currency.

 

[GinandTonic]

$25-30k for a Clio?

 

[Godwynn]

I think the Germans could support their exports again by shipping them their old Trabants.

 

[mrt144]

Read the full storyhere.


Good thing they stayed away from those evil IMF guys! Good luck saving money to buy a car when there's 30% inflation, a two-year waitlist and restrictions on owning foreign currency.

Command economies

 

[Slaughter]

Can't they just import some Brazilian-made cars? We would probrably do some good prices.

Dumb Venezuelans. That's why they should be annexed by us.

 

[Princeps]

actually, nevermind.

 

[amadeus]

Can't they just import some Brazilian-made cars? We would probrably do some good prices.

Nope, Venezuela has been trying to block the import of foreign cars. From the article: Last year the government implemented several measures to stimulate the motor industry, limiting imports and promoting the sale of cars assembled in the country.

 

[Princeps]

Also, as for inflation. Venezuela should aggressively pursue improvements in agriculture. Increased agricultural production is key to bringing inflation down.

 

[Antilogic]

Nope, Venezuela has been trying to block the import of foreign cars. From the article: Last year the government implemented several measures to stimulate the motor industry, limiting imports and promoting the sale of cars assembled in the country.

This has to be the most backwards and idiotic thing ever.

I hearby give this thread a new subtitle: Protectionism fail!

 

[JollyRoger]

Appreciation in value is such an ugly thing. Good thing it has been ran out of our housing and financial markets.

 

[mrt144]

Appreciation in value is such an ugly thing. Good thing it has been ran out of our housing and financial markets.

Appreciation in price rather.

 

[TheLastOne36]

Wow i've known this for some time... You americans are late with information... This was news a couple years ago.

Basically, due to tight regulations car manufacturers don't really bother to mass-sale cars to Venezuela, thus they become rare, and since people need cars, they'll pay that much more for a used car. Brand new cars still cost more then used cars, but since they're aren't much of them, people will pay more for used cars, rather then having to go to America, buy a new car, and leave it in a lot for 6 months before bringing it to Venezuela.

 

[mrt144]

Wow i've known this for some time... You americans are late with information... This was news a couple years ago.

Basically, due to tight regulations car manufacturers don't really bother to mass-sale cars to Venezuela, thus they become rare, and since people need cars, they'll pay that much more for a used car. Brand new cars still cost more then used cars, but since they're aren't much of them, people will pay more for used cars, rather then having to go to America, buy a new car, and leave it in a lot for 6 months before bringing it to Venezuela.

Just cause you Eastern Bloc commies all share your command economy information doesn't mean you're "in the know" about anything useful.

 

[Slaughter]

Nope, Venezuela has been trying to block the import of foreign cars. From the article: Last year the government implemented several measures to stimulate the motor industry, limiting imports and promoting the sale of cars assembled in the country.

The heart of the problem lies inside the spoiler:

Spoiler :

There is NO Venezuelan motor industry, HAHAHHAHHHAH!!

 

[TheLastOne36]

Just cause you Eastern Bloc commies all share your command economy information doesn't mean you're "in the know" about anything useful.

What if i told you i'm half Venezuelan?

 

[mrt144]

What if i told you i'm half Venezuelan?

You're the one that brought the Commie H1N1 virus to Venezuela, aren't you?

 

[TheLastOne36]

Mexicans aren't commies...

 

[mrt144]

Mexicans aren't commies...

Not yet!

 

[luiz]

The wonders of "21st Century Socialism"!

The real tragedy is paying 25-30 thousand dollars in a crappy Renault Clio. Even in Brazil, infamous for our ridiculously overtaxed and expensive cars, a Clio goes for about 15,000 USD. And you can have it in the same day.

Someone should link to this thread in Mark's "What is wrong with Socalism[sic]?" thread. The question is answered.

 

[amadeus]

The wonders of "21st Century Socialism"!

I was going to call it "21st Century Shortages" but I think some people wouldn't get it.

The real tragedy is paying 25-30 thousand dollars in a crappy Renault Clio. Even in Brazil, infamous for our ridiculously overtaxed and expensive cars, a Clio goes for about 15,000 USD. And you can have it in the same day.

luiz, these aren't even new Clios, they're used. No other country in the world does a used car sell for $30,000... unless that country is Monaco and you're putting the down payment on a Maserati.

Someone should link to this thread in Mark's "What is wrong with Socalism[sic]?" thread. The question is answered.

That didn't even occur to me... well, you had the idea, you do it.