Vehicle sales in Venezuela declined 63.9% year-on-year (y-o-y) in December, to 2,959 units. We expect to see a 24.3% drop in the sector in 2013, as the poor macro picture in Venezuela is increasingly impacting consumer sentiment. Inflation is running very high, eroding consumers' purchasing power and appetite for big ticket purchases, such as new cars. High interest rates curtail demand for vehicle loans, and the ongoing weakness in the Venezuelan bolivar increasingly makes vehicle imports more expensive in local currency terms.
BMI remains bearish on vehicle production in Venezuela, as the government continues to intervene in the economy, further restricting access to foreign currency and implementing import restrictions on vehicle components. Furthermore, the ongoing weakness in the currency will serve to make supplier imports more expensive, exacerbating shortages of components. Indeed, vehicle production in Venezuela decreased 31% y-o-y in 2013, to 71,753 units, as these dynamics continue to play out. The declines in the market moderated in the middle of the year due to lower base effects. We forecasted a 31% drop in output for the year as the ongoing deterioration in the country's macro picture impacted the segment.
BMI has long maintained that in order to see sustained growth in vehicle production, the regulatory environment needs a complete overhaul, particularly in the issuance of assembly permits and access to foreign currency. This does not look likely, however, and Venezuela continues to rank below the regional average on BMI's Risk/Reward Ratings.
The Venezuela Autos Report features the latest data and forecasts covering production, sales, imports and exports.
Business Monitor International (BMI)'s Venezuela Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the automotives market in Venezuela.
- Benchmark BMI's independent automotives industry forecasts on Venezuela to test other views - a key input for successful budgetary and planning in the Venezuelan automotives market.
- Target business opportunities and risks in the Venezuelan automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Venezuela.
- Assess the activities and market position of your competitors, partners and clients via our Competitive Landscape Analysis.
BMI Industry View
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Historic data series and forecasts to end-2018 for all key industry indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast, including:
Total production value (US$bn); total production of units; production by vehicle-type (including cars, commercial vehicles, trucks and buses); total sales value (US$bn); sales by vehicle-type, including passenger cars and commercial vehicles (vans and microbuses, pickups, trucks and buses, 4 wheel drive); total exports by value (US$bn) and by units; total imports by value (US$bn) and by units; contribution to GDP; employment in industry.
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