Car sales down 75.46% since 2007 in Venezuela
The car industry has been on the decline for four straight years
While some economic sectors rebounded last year amidst increased consumption, such an improvement was not felt in the car industry. On the contrary, 2011 was the fourth consecutive year of declining sales of new cars.
According to the figures provided by the Venezuelan Automotive Chamber (Cavenez), car sales last year barely amounted to 120,689 units, 3.6% less than in 2010.
Compared with 2007 -a record year for the industry-, in 2011 the contraction reached 75.46%. In 2007, 491,899 cars were sold, that is, 371,210 more cars than in 2011.
A significant number of assembly plants and importers started expansion plans in 2006 and 2007 amidst the sector's boom. However, the car industry has been hit by a drastic decline in supplies because of the restrictions imposed on assembly plants and importers by the government.
"Our problem is supply. Everything we produce, we sell. Demand is higher than the market's supply," stated a source linked to a car dealer.
The source explained that it is difficult to estimate a "real demand," but assured that if all carmakers manufactured 200,000 units a year, all cars would probably sell. The source added that in an environment of foreign exchange controls, high inflation, low interest rates, and a risky real estate market, vehicles are a valid option to protect oneself from inflation.
Following a wave of nationalizations carried out by the late President Hugo Chavez between 2007 and 2012, Venezuela has become the second most frequent respondent to investment treaty arbitration in the world (38 cases in total), after Argentina.