An astonishing rise in domestic sales in Venezuela – nearly 50% year on year from January to October– prompted the country to announce strict rules to slow down buying.
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From next January a licensing régime will hit fully-built imports hard and followed a 90%-plus rise in shipments of CBU vehicles, now accounting for most of the local market.
The decision will hit the Colombian auto industry, which is largely dependent on exports to Venezuela.
Brazil exports more fully-assembled vehicles than CKD to Venezuela, which is its fourth largest export market after Argentina, Mexico and South Africa – and the fastest growing one this year.
Even so, a sudden and deep slump is worrisome, but not enough to make Anfavea-associated companies sleepless, according to communications director Ademar Cantero, speaking exclusively to just-auto.
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By GlobalData“The Venezuelan market in 2006 accounted for just 5% of all Brazilian vehicle exports. This year the proportion is likely to rise. Venezuela is not a Mercosur member yet, but if it ever joins the bloc will have to submit to the rules. This includes free trade, without quotas or artificial measures. If it abides by these, we do not see trouble ahead,” he said.
According to Venezuelan analyst and journalist José Jacobi, the new ruling has divided importers and assemblers in much the same way precious foreign currency will be compulsorily split between the CBU and CKD sectors.
“Some people think that there will be a sales slowdown due to import restraints and consequent shortage of products. Others feel that it is necessary to control imports and the spending of foreign currency, even for replacement parts and CKD kits,” he said.
The issue is complex because the new government policy also requires all vehicles, either locally assembled or imported, to be fitted with natural gas equipment. The reasons are unclear, for the country has one of the lowest petrol pump prices in the world – currently about $US0.20 per litre (roughly $0.91 an imperial gallon).
Others aspects of the new legislation are not yet clear or are likely to be changed, which brings uncertainties.
Fernando Calmon
