Venezuela: Car sales record largest drop in nearly four years
December 6, 2013
In November, car sales plunged 51.1% over the same month last year, reaching 5,912 units according to figures from the Venezuelan Automotive Chamber (CAVENEZ, Camara Automotriz de Venezuela). The reading follows a 26.5% decline in October and marks the sharpest drop since January 2010.
In the 12 months up to November, car sales reached just 104,112 units, which is 22.5% lower than the level observed in the same period last year (October: -16.0% year-on-year) and marks the lowest level since August 2004. Car sales remain at one-fifth of the peak of 491,899 units recorded in the full year 2007. Extreme supply shortages following government restrictions on both assembly plants and importers have severely hampered sales of vehicles in recent years.
On 3 December, under the special ruling powers that the National Assembly granted him, President Nicolas Maduro signed a decree setting limits on prices for new and used cars and allowing individuals with foreign currency accounts to import vehicles. The country's shortage of new cars has boosted prices for second-hand cars. The government hopes that the price limit will aid in curbing soaring inflation. Analysts have warned, however, that this decree will only serve to encourage black market activities.
Given the limited availability of timely data for the real sector, analysts often use car sales as a proxy for private consumption. LatinFocus Consensus Forecast panelists expect private consumption to expand 2.0% this year, which is unchanged from the previous month's estimate. Next year the panel sees private consumption growth at 0.8%, which is down 1.4 percentage points over the previous month's estimate.