Venezuela will stop importing Colombian cars amid cooling diplomatic relations between the two countries, President Hugo Chavez announced.

Under the move, Colombia will have to find new markets for the up to 10,000 cars it expected to export to Venezuela this year.

Speaking at the government palace, Chavez said: “Zero, we are not going to bring one car from Colombia.”

He claimed Colombia sells overpriced cars to Venezuela, “double” what they cost domestically. The move is likely to deal another blow to the Colombian industry, already reeling from plunging sales plus import and currency restrictions.

According to Colombian trade federation Asopartes, Colombia exported 15,000 cars to Venezuela in 2008, compared with 45,000 units the year before, as political tensions between the two neighbouring countries intensified.

Observers said Colombia was working to find new markets in Chile, Peru, Argentina, Brazil and Central America.

Meanwhile, Argentina was moving to benefit from Colombia’s quarrels with Venezuela. According to local press reports, President Cristina Fernandez was due to meet Chavez next week to sharply boost Argentine car exports from some 21,000 cars shipped in both 2007 and 2008.

Argentina’s carmakers are also struggling amid slumping demand triggered by the global recession.

Ivan Castano