Boston, MA -- (SBWIRE) -- 06/09/2014 -- Vehicle sales in Venezuela declined 87.5% y-o-y, to 3,213 units, in Q114 as the increasingly poor economic outlook also impacts the demand side of the sector. 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 (and further weakness in the unofficial exchange rate) increasingly makes vehicle imports more expensive in local currency terms
Vehicle production in Venezuela declined 76.1% y-o-y in the first three months of 2014, to 3,424 units, as the domestic market contracts and the country's business environment deteriorates. BMI forecasts a 75% decline in output over the full year as these dynamics continue.
BMI has long maintained a bearish outlook 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 auto components. The ongoing weakness in the local currency will also serve to make supplier imports more expensive, further exacerbating the shortage of components. Furthermore, the worsening business environment makes profitable operations in the country increasingly difficult as the government seeks to limit profit margins for companies.
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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
Summary of BMI's key industry forecasts and views, covering production, sales and the introduction of new technology or products.
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