Venezuela’s Auto Production Tumbles 72.5% In 2014 To Worst On Record

Posted by EM_Equity ⋅ January 17, 2015 ⋅ Leave a comment

Filed Under Auto Production, central banks, currency controls, economic collapse, Economic Crisis, Economy, EM, FM, FX, investing, Investment, Latam, LATIN AMERICA, manufacturing, Nicolas Maduro, Slowdown, South America, Venezuela

An automobile assembly plant in Venezuela. Photo courtesy of YVKE Mundial.

Venezuela’s national automakers organization – Cavenez – says that auto production in the recession-hit nation tumbled 72.5 percent in 2014 to a meager 19,759 units, the worst performance on record, Reuters reported on Saturday.

In Venezuela, automakers – alongside private businesses – have been challenged as the government’s currency controls have inhibited them from importing essential components due to restrictions and delays of dollar purchases.

In addition to the fall in auto production, sales of new autos plunged 76 percent in 2014 to mere 23,707 units, Cavenez added in the report.

Venezuela operates three different currency exchange controls: 6.3 bolivars per dollar for preferential goods, and between 11 and 50 bolivars per dollar for other sectors through two Central Bank mechanisms.

Various automakers have suspended or cut output at times amid parts shortages, labor disputes, and the national’s economic slowdown.