Finding a Car an Odyssey in Venezuela as Government Policies Create Scarcity

[Bacchus4.0]

http://laht.com/article.asp?ArticleId=689917&CategoryId=10717

CARACAS – -------

Buying a used 2012 Ford Explorer SUV means coughing up 1.2 million bolivars, the equivalent of about $60,000 at the street exchange rate and double the cost of a new car, according to the country’s leading used car website. Late-model used Jeeps and Ford Fiestas also cost double the price of what a new model would cost. That runs counter to the trend elsewhere in the world where new cars lose value as soon as they’re sold.

The price reversal, many economists say, is the result of President Hugo Chavez’s socialist-oriented controls, which have turned this country’s economy upside-down and already produced shortages of basic supplies such as sugar and cornmeal. In the auto market, those policies have dried up the inventory of new cars, and Venezuelans who manage to drive one away from a car lot often resell it quickly at a profit.
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Trying to stem capital flight, Chavez’s government has for the past decade maintained currency exchange controls, which have made buying dollars difficult for Venezuelans and produced a black market where much higher rates are paid for greenbacks. At the same time, the government has cut back on U.S. currency being sold through an official exchange agency to businesses, creating a shortage of dollars available for imports.

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The currency shortages have also fueled inflation topping an annual rate of 20 percent, but dealers have been reluctant to raise their prices too much for fear of being accused by government officials of price speculation, which might jeopardize their access to cheap dollars through the official exchange. The inflation has further spiked demand, as many Venezuelans buy cars, as well as apartments and appliances, as an investment to prevent their savings from being eroded by inflation.

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[Demeter]

1. You want Climate Change Stopped?

Making combustion engines unaffordable is the quickest, cheapest, most effective, least painful, most logical process to the goal.

Can't have it all ways.

And if you think the US will avoid that scenario, you are dreaming.

[naaman fletcher]

2. LOL

You think this is an intentional policy?

You are talking about one of the worlds largest oil drillers, which charges consumer like 6 cents for a tank of gas.

[Bacchus4.0]

3. the climate never stops changing.

The climate has been changing since the earth was formed. A more immediate step that Venezuela could take to reduce their greenhouse gas emissions would be to elevate their existing price of gas from 10 cents or so a gallon to $4.00 a gallon. I'd like to see the government propose that policy and the subsequent public reaction.

[joshcryer]

4. Venezuela sided with the US at Rio+20.

This just underscores that Venezuela's gas price subsidies are not intended to help the poor but rather the rich who can afford cars.