CARACAS: As decreased production makes new cars virtually impossible to buy in Venezuela, government officials are hoping Chinese automaker Chery will expand factories in the country to meet demand.
Minister of Industries Jose David Cabello indicated Friday via Twitter posts that he had been in talks with Chery International General Manager Zhou Biren regarding “the expansion of assembly plants throughout the country … to satisfy our country’s demand for vehicles.”
The Chery brand is highly popular due to a combination of quality and price.
The current administration, led by President Nicolas Maduro, has spearheaded a government program to make two Chery car models assembled domestically available at fair prices to the public. According to the official numbers, 7,000 of these cars had been sold as of June.
Production Problems
Chery currently has two plants in Venezuela, both of which handle assembly. Combined, they have an annual production capacity of about 30,000 cars.
But according to a report released last month, all seven of the country’s car assembly plants reached only 12,010 cars combined between January and October, 81.6% fewer than during the same period last year.
The Venezuelan Automobile Chamber estimates that about 15,000 vehicles will be assembled by the end of the year.
This has made it nearly impossible to buy new vehicles across the country, which was once the third-largest automobile producer in South America.
Repair parts for existing cars can also be difficult to find — which is especially worrisome given that a recent survey found that 77% of cars are in need of some maintenance or repairs.
Rising Value of Used Cars
This has also led to an unusual phenomenon in which used cars are immensely popular and valuable.
Because so few new cars have entered Venezuela in the past year, the value of used cars has approximately doubled. The Washington Post estimated as of Nov. 19 that a “bare-bones 2012 Toyota Corolla” is worth about $40,000 in Caracas.
Many Venezuelans are even buying used cars as investments in an effort to outrun inflation of the bolivar, which stands at about 63%.
“I think this must be the only country in the world where a car drives out of a dealership and goes up in value,” Rosa Rosales, the sales manager of a Caracas car lot, told the Post.
