Venezuela: Car sales fell by 50.5 per cent in 2003; set to recover in 2004

BBC Monitoring International Reports

January 16, 2004

Caracas, 14 January: The Venezuelan motor sector is in the midst of a serious crisis, caused by the recession affecting the country, which made sales drop by 50.5 per cent last year, a source from the sector affirmed today.

The president of the Venezuelan Chamber of the Motor Industry (Cavenez), Antonio Martinez, told Notimex that in 2003, 63,726 vehicles had been sold, 50.5 per cent less than last year, when 123,623 vehicles were sold.

Martinez said that the local car market continues to show no signs of recovery, after reaching record sales of 216,977 vehicles in 2001.

He said that the factors that had influenced the sector's evolution were the economic crisis, the national strike that the opposition held between December 2002 and January 2003, political problems and the exchange rate controls decreed last year.

Despite the fall in sales in 2003, Martinez asserted that there are signs that the market will recover this year, during which he estimates that some 96,000 new cars could be sold.

"We have maintained continued growth from January to December (2003), which allows us to estimate that sales will increase by 30 per cent. At the end of the year, there was greater demand than real supply, about 8,000 units per month," he said.

The sector leader said that the relative stability in interest rates for car loans and the financial support of the assemblers "have been giving the market greater dynamism over the last few months".

According to Cavenez, General Motors of Venezuela maintained its leadership in the domestic market with 36 per cent of sales (19,598 units), followed by Ford Motors with 22.62 per cent (12,296) and Toyota with a 19.23-per cent participation.

According to the organization, the remaining shares of the market corresponded to Mitsubishi (13.13 per cent), DaimlerChrysler (7.36 per cent), Iveco (1.52 per cent) and Mack (0.08 per cent).

The majority of sales were passenger cars, with 67.22 per cent of the total, while only the categories to make up over 10 per cent of sales were SUVs (12.8) and light lorries (11.58).

A total of 28,432 cars, equivalent to 44.62 per cent of the national market, corresponded to the category of family or popular cars, segments which enjoy the benefit of a VAT exemption.

The national economy experienced an 11.7-per cent drop in GDP in 2003, after registering a 9.0-per cent drop in 2002, according to statistics from the Venezuelan Central Bank (BCV).

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Source: Notimex news agency, Mexico City, in Spanish 2205 gmt 14 Jan 04 / BBC Monitoring

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