General Motors’ Venezuelan unit, the biggest vehicle assembler in the South American country, has restarted production after a three-week halt caused by government foreign exchange controls, a spokesman told Reuters.
Go deeper with GlobalData
“The plant has reopened; everything is back in business,” General Motors Venezolana’s marketing and sales director Peter Friedrich told Reuters.
He added that in talks with the government, the company had succeeded in ironing out the problems caused by the currency curbs which had forced General Motors to temporarily suspend assembly operations in Venezuela at the end of March, Reuters said.
Squeezed by a crippling opposition strike that slashed vital oil exports, leftist President Hugo Chavez’s government halted foreign currency trading in January, tightly restricting the supply of US dollars to the economy, Reuters noted.
The news agency said Venezuela’s foreign-owned vehicle assemblers, along with other local manufacturers dependent on imports, consequently had been unable to import essential parts due to the tight restrictions and more than two months of delay in the allocation of dollars.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataReuters said the restart of GM’s Venezuelan unit indicated that the government was moving, albeit slowly, to activate mechanisms to allocate hard currency to health, food and industrial sectors.
But private business leaders have fiercely criticised the controls, introduced to stem heavy capital flight and halt a sharp slide in the bolivar currency triggered by the opposition strike in December and January. They say many local companies will face bankruptcy because of the curbs, Reuters said.
Friedrich told the news agency the government had widened the list of imported car components for which dollars would be allocated, removing an obstacle that had hindered General Motors’ assembly operations. The company was also registering itself on a list of importers and exporters authorised to receive dollars.
Reuters said that, after losing exports for March and April, General Motors Venezolana expected to be able to complete its scheduled May exports of models to Colombia and Ecuador. “We are very optimistic that we can fulfil our schedule,” Friedrich told the news agency.
