Kevin Gray, Reuters
First posted: Monday, September 05, 2011 11:21 AM
CARACAS - Venezuelan President Hugo Chavez is making a new drive to put
his socialist revolution on wheels.
The fiery critic of capitalism is promoting a government-led joint
venture with a Chinese automaker that he says will offer cheaper cars to
Venezuelans and promote socialist principles on the factory floor.
"This is the revolution advancing," Chavez said. "These quality,
good-looking and cheap cars are coming to Venezuela. Only under
socialism is this possible."
It is the latest attempt by the populist leader, who will seek a new
six-year term at next year's presidential election, to bring Venezuelans
cut-rate prices on everything from food to healthcare and housing.
The deal also highlights Chavez's continuing efforts to deepen
Venezuela's ties with China, which he has cultivated along with Russia,
Iran and Belarus.
The project with China's Chery Automobile plans to produce two compact
models in Venezuela, a car-crazed country where prices can be three
times as high as those for similar models in the United States or Europe.
"We are going to sell these cars at half — half — the price of the
capitalist market," Science, Technology and Industry Minister Ricardo
Menendez told state television.
A government statement about the joint venture touts the cars'
"solidarity" prices.
"This is the result of revolutionary policies designed to improve
people's quality of life and combat speculation by multinational
companies," it read.
The smaller of the two cars, a two- or four-door hatchback, is expected
to carry a price tag of nearly $20,000. A larger, sedan-style car will
cost around $28,000.
Chavez recently inaugurated the plant and said he personally named the
cars, which are based on current Chery models. Production is expected to
start before the end of year.
But some analysts say that while he is pushing the latest offensive in
his war against big business, he is failing to address problems for car
makers already operating in Venezuela.
CHEAP GASOLINE
Local car production has fallen in recent years, and auto executives
complain the South American country's tightly regulated foreign exchange
market has dried up access to dollars for assembly plant imports.
Major brands like Ford, Toyota, Chrysler and General Motors manufacture
their parts abroad and then assemble their vehicles in Venezuela.
"What Chavez fails to mention is that taxes are a big reason why cars
are so expensive here," Raul Alvarez, director of local industry
magazine La Guia del Motor, Spanish for the "Car Guide", told Reuters.
Demand for cars, however, remains strong in Venezuela, driven by the
cheapest gasoline prices in the world.
Subsidies mean gas sells at the pump for just 0.5 U.S. cents per liter .
And with inflation hovering around 25 percent, many Venezuelans see cars
as a hedge against rising prices.
The new car project revives an attempt by Chavez five years ago to
produce a capitalism-busting car with Iran. That joint venture, called
Venirauto, built cars based on 1980s models and has largely sputtered,
struggling to produce 10,000 vehicles a year.
No dealer network or credit facilities were put in place, and some
interested buyers complained that the cars ended up going mostly to
public officials and other people linked to the government.
Still, the latest plan has drawn interest from some Venezuelans.
On a government Web site announcing the venture, more than a dozen
people have posted messages expressing interest in the new cars and
cheering Chavez. "What a marvelous idea, comandante," wrote one.
The site said Chavez planned to offer more details during a nationally
televised speech in the coming weeks about how Venezuelans will be able
to buy the cars.
http://www.torontosun.com/2011/09/05/chavez-touts-new-socialist-cars-for-venezuela
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