Free Falling: Venezuela Auto Production Drops 82% in 2014

CARACAS, Venezuela — Venezuela's automobile production plummeted 82% in the first three quarters of 2014, a casualty of the shortage in imported materials, an industry group said in its monthly report Monday.

This year has been called the worst ever for Venezuela's automobile industry by spokesmen from automakers as well as union representatives.

As of September, the total number of vehicles produced was 10,286, less than a fifth of the 58,073 vehicles sent from assembly lines between January and September 2013, the Automotive Chamber of Venezuela reported.

Two companies, truckmaker Mack and automaker Chrysler of Venezuela, have not produced any vehicles for the past five months.

Automakers in the Latin American country have been slowing or shutting down manufacturing plants and factories due a lack of foreign currency to import parts and materials, prompting the collapse in production as well as related labor problems.

On top of the problems of importing the raw materials, the government also sharply regulates sales prices for new cars, leaving automakers with little incentive to maintain investment in production.

The plunge in automobile manufacturing comes amid a Venezuela economy in crisis, with annual inflation of more than 60%, President Nicolas Maduro's socialist government battling crippling shortages of basic goods and dollars in short supply because of strict foreign exchange controls.

The foreign currency shortage has also led to a near $2 billion debt owed to manufacturers. Caracas require companies to sell products in bolivars, the national currency, on the government promise to reimburse them in dollars.

Copyright Agence France-Presse, 2014