Venezuela's car industry experiences worst kickoff since 2003

The current situation facing Venezuela's car industry is quite discouraging. In January, the seven private-owned car makers based in the country assembled some 1,945 vehicles only, 66% below the figure recorded during the same period in 2013, according to information disclosed by the Venezuelan Automotive Chamber (Cavenez). 

Although the industry's performance is usually slow in January, the hard times it is facing are mirrored by the results the car industry has recorded in recent years.

Cavenez's figures suggest that production in January was the worst since 2003, when the country's companies and economy suffered a slowdown stemming from a strike in the oil industry, which resulted in the production of just some 87 vehicles in January that year.

If we compare the figure recorded in January this year with the results in the same month of 2007, the production in January 2013 plummeted by 83%.  

The driving forces

Sources related to the industry explained that the slowdown in production last month is attributed, in the first place, to the latest revision made in the Venezuelan labor legislation, which provides for an extension in workers' vacation period.

Some of the car assemblers in the country face debts in US dollars. This has led to a limited supply of raw material for car assembling.  

The lack of US dollars for imports and delays in the authorizations to import raw material are among the main driving forces behind the drop in the car industry's production.

Translated by Jhean Cabrera