Consumers Line Up to Buy Chinese-Venezuelan Cars

March 11, 2012
Unlike competing Japanese and American cars, import preferences granted by the Venezuelan government mean the Chinese cars are cheaper.

Just weeks after the opening of four Chery dealerships in Venezuela, dozens of people are lining up every day to buy the first Chinese cars being sold in the Latin American nation.

Unlike competing Japanese and American cars, import preferences granted by the Venezuelan government mean the Chinese cars are cheaper, which has attracted a steady stream of interested customers.

The cars are assembled in Venezuela under an agreement with the Chinese, who President Hugo Chavez considers a major ally. The manufacturing enterprise is financed jointly by Chery and a Venezuelan public-private company.

Three other Chery dealerships are operating in other parts of Venezuela. The manufacturer plans eventually to expand to 18 Venezuelan dealerships.

Chavez named the car models the Arauca and Orinoco after two rivers that run through Venezuela.

Until sales of the Chery began, Venezuela suffered a shortage of cars because of import and exchange controls on other foreign vehicles.

Japanese and American brands like Toyota and Chevrolet operate plants in Venezuela, but they do not benefit from "exchange preferences" like the Chinese companies, according to economist Jose Guerra.

"Cadivi (the government agency that oversees foreign exchange) provides discretionary dollars and encourages Chinese enterprises" because of the close relations between the Venezuelan and Chinese governments, he said.

State banks offer credit lines of as much as 80% of the cost of the cars.

"The first weeks we were helping 250, 300 people a day, but it was overwhelming and some employees quit the first day. Now we serve customers according to identity card numbers and that's about 150 people daily," said Carlos Vargas, the Chery dealership manager.

The auto dealers have been able to keep up with demand so far because the manufacturing started months before the dealership opened. The dealership's management hopes to sell about 400 cars a month when sales reach a normal pace, which Vargas says will likely be later this year.

About 5,000 of the vehicles were assembled last year by the Chinese-Venezuelan enterprise. This year, they hope to assemble 18,800 of the vehicles.

Other Chery cars are imported from China, but mostly for sale to officials and offering better options than many cars purchased at the dealerships.

The Cherys are only one line of Chinese products recently offered in Venezuela under trade agreements.

Since 2010, Venezuelans have been able to buy Chinese mobile phones and household appliances, which are sold for discount prices at state stores.

Copyright Agence France-Presse, 2012

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