Venezuela

Last modification: 4 avr 19
Introduction: 

Bordering the Caribbean Sea and the North Atlantic Ocean between Colombia and Guyana, most of Venezuela's population is concentrated in the northern and western highlands along an eastern spur at the northern end of the Andes, an area that includes the capital of Caracas. 

Under President Nicolás Maduro, the ruling party's economic policies have expanded the state's role in the economy through expropriations of major enterprises, strict currency exchange and price controls that discourage private sector investment and production, as well as an overdependence on the petroleum industry for revenues. Hit with extreme hyper-inflation, current concerns in the country include human rights abuses, rampant violent crime, high inflation, and widespread shortages of basic consumer goods, medicine, and medical supplies.

 

Chapter 1: Economic and business environment

Demographics

2018

  • Population of 31.7 million
  • Growth rate of 1.21%
     
Capital

Caracas (population of 2.94 million)
 
est. 2018
 

Major cities

Caracas (2.94 million)
Maracaibo (2.18 million)
Valencia (1.73 million)
Maracay (1.18 million)
Barquisimeto (1.19 million)

2018
 

Languages

Spanish (official)

GDP

2018

  • US$172 billion, down 18%  year-over-year
  • US$5,425 per capita


 

Unemployment rate

2017

27.1%
 

Main industries

agricultural products, livestock, raw materials, machinery and equipment, transport equipment, construction materials, medical equipment, pharmaceuticals, chemicals, iron and steel products, crude oil and petroleum products

Currency

Venezuelan bolivár

Interest rate

22.6%

February 2018

Fleet Maturity Index (scaling)

Some 10 years ago, annual car production was around 318,000 units, according Carabobo state entrepreneurs department Cavanez which represents auto manufacturers in the country.

Production has taken a major downturn since then, reporting only 2,850 vehicles produced in 2018
.

The problem, according to Cavanez, is that parts and components used to assemble vehicles need to be imported. Local affiliates are having problems acquiring dollars to accomplish their transactions as the currency is actually distributed by the local government.  

 

Political key info

Venezuela is currently (2019) debating who its President is.

Considering the latest elections, Nicolás Maduro Moros has been the 46th President of Venezuela since 2013. He previously served as Minister of Foreign Affairs from 2006 to 2013 and as Vice President of Venezuela from 2012 to 2013 under President Hugo Chávez. Unfortunately, under his rule, the country has been facing a lingering economic crisis and extreme hyperinflation. 

However, Juan Gerardo Guaidó Márquez has proclaimed himself as the country's interim president as Maduro's reelection last year has received widespread condemnation for electoral fraud. Besides being an engineer, Mr. Guaidó has been President of the National Assembly of Venezuela since 5 January 2019. Moreover, he is a member of the centrist social-democratic Popular Will party, and also federal deputy to the National Assembly, representing the state of Vargas.

The world is mixed as to who they recognize as president. While countries such as Russia, Cuba, and Turkey favor Maduro, countries such as the United States, Brazil, and much of Europe favor Guaidó.

Inflation

2018

  • Highest inflation in the world
  • 13,864% per year

Chapter 2 : Automotive market, segments & sales

Total Car park

2007

  • 4.12 million in 2007, based on a population of some 28 million at the time.
  • Approximately one in every seven people

 

 

New vehicle registrations (Cars, LCV, Trucks)

2018

A total of 2,069 cars were registered in 2018, according to the World Bank.
Hit by a lingering economic crisis, new vehicles sales from 2012-2017 plummeted 98%.  

Production/Sales by brand  - Best to Worst

 

Ford 

  • Most successful brand in the country.  
  • Approximately 1,132 vehicles sold in 2017 (46% of market share) 
  • 2018 looks quite weak. 

 

Toyota 

  • Despite national crisis, impacted less than some other brands 
  • Producing 400-1,000 cars per year 

 

FCA 

  • In 2017, approximately 600 vehicles produced 
  • In 2018, a total of 110 were built at its facilities in the city of Valencia. 

 

Chrysler 

  • Still committed to local market
  • In 2017, a total of 123 cars produced 
  • 2018 is yet to be announced 

 

General Motors 

  • No production
  • All dealerships closed, and no plan to return  
  • After-sales service still available available
Top 5 brands (total market)

2017

1. Ford (45.8% share)
2. Toyota (45.6% share)
3. Jeep (5.9% share)

 

Model preference top 5 (total market)

2017

1. Toyota Hilux (23.8% share)
2. Ford Explorer
3. Toyota Fortuner

 

Dealer network (including fleet dealer network)
Battered severly by its economic and political crisis, many dealerships are either closed or empty and automobile factories - in 2018 - were seen to be operating at 10% their capacity. However, much of the country's automobile dealership infrastructure is still intact and waiting for changes that will put the country's industries back on track.

According to Gabriel Briceño who is the president of Nueve Esparta state automobile distributors association Adane, the country is awaiting a "legal platform" which will assure investments, restart automobile production, and help citizens regain their purchasing power. 
 

 

Used car market/renewal cycle

Over the last five years, new vehicle sales in Venezuela has plummeted by some 98%. The country's used car market, however, has stayed afloat in some regions. It has actually helped the economy to some extent due to the demand for automobile mechanics.

Chapter 4: Taxation & legislation

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Chapter 5: Car policies

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Chapter 6: Funding methods

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Chapter 7: Fuel

Venezuela has the lowest priced gasoline in the world.

Average gasoline price per liter: US$0.01

World average: US$1.10
(est. March 6, 2019)

Venezuelan President Nicolas Maduro, however, announced in late 2018 that gasoline prices are expected to rise soon to curb smugglers reselling fuel for a profit in neighboring countries. According to the president, not all Venezuelans will be impacted. Those who have a government-issued license – a special type of ID card – will continue to receive direct fuel subsidies for approximately two years. 

As of January 2018, about 16.5mn of the 31.5mn citizens had requested the card.

 

Chapter 8 : TCO components

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Chapter 9: Safety, insurance and telematics

Safety and insurance are certainly of major concern for fleet as well as society as a whole right now, owing to the dramatic impacts of the current economic and political scenario in the country. In fact, it is ranked as the most insecure nation in the world by Gallup due to shortage and hunger: 98% of the crimes remain unpunished.   

Chapter 10: Environment

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Chapter 11: Mobility

Taxis are used particularly for transportation between bus terminals and city centers but also for getting between towns. They don't have meters so always fix the fare with the driver beforehand and be aware that there are fake taxi drivers. 

All cities and many major towns have their own urban transportation systems, which usually include small buses or minibuses. Depending on the region, these are called busetas, carros, carritos, micros or camionetas. In many larger cities you can also find urban por puestos. Caracas buses aren't noted for their good safety record, and armed muggings are a frequent occurrence.

Note: Although public transport in the city has historically been quite cheap, due to the current economic crisis and political unrest in some cities, many transportation systems are actually not working up to par so plan accordingly.

 

Chapter 12: Key trends to watch