Despite Economic Recession, New Car Launched By Toyota In Venezuela

A bright note for a local auto industry that is struggling to survive amid Venezuela’s deep economic recession was marked when Toyota Motor Corp on Wednesday unveiled a new model of its Corolla vehicle that will be assembled in the country.

Toyota said it expects to raise production in 2018 and the company was currently producing 20 units per month of the new Corolla and the vehicles will be sold only in Venezuela. However, with the setting of the economic crisis, demand for cars in Venezuela has fallen steadily, acknowledged executives from the company.

“We know the current state of the industry,” said Toyota Venezuela president Hiroyuki Ueda at a press conference to present the new vehicle. “However, we have overcome obstacles, we have a new Corolla – and this is for us a reason for celebration.”

According to data that was available from the country’s auto industry association, about 3,000 vehicles were sold last year in the country even though the once-thriving Venezuelan automotive sector was in the habit of seeing sale of almost 500,000 units of cars a year in 2007.

Toyota’s existing facility in Venezuela expects to close out 2017 with output of only 1,200 units and is currently assembling only 100 units per month and the unit currently employs 1,100 staff and has capacity of 22,000 units per year.

In Venezuela, there has been a steady lack of raw materials that is primarily the result of a shortage of dollars caused a dysfunctional currency control system and that has impacted about the 100 odd multinationals that have remained in the country but with operations at a minimum due to that deficiency.

The government in Venezuela has allowed the car industry to import assembly parts without going through the exchange controls by allowing them to sell their cars in dollar which has been prohibit for most items but has specifically approved for the auto industry, and several automakers including Toyota takes advantage of that leeway granted by the Venezuelan government.

a luxury edition that will be sold in a combination of bolivars and dollars at an approximate cost of around $30,000 and a family model that sells only in local bolivar currency are the two variations of the Corolla that Toyota will sell in the country.

In order to help maintain operations at an optimum level in relation to market demands, the subsidiary uses revenue from the export of locally-manufactured parts, said Wilfredo Valdivia, Toyota’s institutional relations manager in Venezuela.

“Our priority and philosophy is to maintain production,” Valdivia told the media. “We are working at very low volumes, but we have made a commitment.”

(Adapted from Reuters.com)

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