Chavez Orders Toyota Probe, Says Carmaker
‘Can Leave’ Venezuela
By Daniel Cancel
(Bloomberg) -- Venezuelan President Hugo
Chavez ordered an investigation of Toyota
Motor Corp., saying the world’s largest
carmaker “can leave” should it fail to meet
production quotas and technology-transfer
laws.
Toyota has refused to make four-wheel drive
models used for public transportation,
Chavez said in comments on state television
yesterday. Chavez said he will impose a
production quota for the cars, which are
used to ferry residents into Caracas slums.
“I’m ordering an investigation into Toyota,
to see how it is that they don’t want to
assemble these cars,” Chavez said. “We have
to force them to, and if they don’t want to,
they can leave.”
Chavez has nationalized foreign oil,
utilities and metals companies in his 10
years in power while vowing to transform
Venezuela into a socialist state. U.S.
automakers General Motors Co. and Ford Motor
Co. also haven’t shared technology and can
be replaced by Russian and Chinese
companies, Chavez said.
Toyota spokesman Paul Nolasco said he is
unaware of the situation and could not
immediately comment when reached by phone in
Tokyo. Venezuela will expropriate the
factories of firms that don’t follow
government regulations, Chavez said.
Single Plant
Toyota has one plant in Venezuela that was
established in 1981 and builds models
including the Corolla compact, Land Cruiser
sport-utility vehicle and HiLux truck,
spokesman Hideaki Homma said. The factory
produced about 13,000 vehicles in 2008
employed 1,899 workers as of March 1, he
said.
GM, Ford, Toyota and Chrysler have the
biggest market shares in the OPEC nation,
which is Latin America’s largest oil
producer.
“We’re not interested in these traditional
companies that have been here 50 years or
more, they’ve never transferred technology,”
Chavez said. “I suggest they gather their
things and go, and we’ll bring in the
Russians, Belarusians and Chinese who want
to make cars here.”
Car production and sales plunged this year
after labor strikes and government delays in
approving dollar sales to companies to
import spare parts and assembled vehicles.
New car sales dropped 40 percent in November
from a year earlier and output fell 17
percent through the first 11 months of the
year.
Venezuelans bought a record 491,899 vehicles
in 2007 during an oil-fueled consumption
boom with low interest rates and government
subsidized programs. Car sales dropped to
126,533 units through November this year.
Government Control
Under restrictions imposed by Chavez in
2003, the government controls the sale of
dollars at the official exchange rate of
2.15 bolivars. The government restricted
dollar sales to companies this year to save
reserves after oil revenue plunged.
GM, the market leader in Venezuela built up
a $1.2 billion debt with Asian suppliers
this year due to delays in dollar sales from
the government.
Venezuela’s economy, the third-largest in
South America, contracted 4.5 percent in the
third quarter led by a 9.4 percent drop in
manufacturing and a fall in private
consumption.
Chavez made yesterday’s announcement during
an event to sell Volkswagen AG cars imported
by the government from Argentina at lower
prices than dealerships owned by foreign
automakers.
The government is selling cars, clothing and
food through a new socialist market network
to reduce inflation and undercut prices of
“capitalist” companies, Chavez said.
Venezuela had annual inflation of 28.6
percent in November, the highest of 78
economies tracked by Bloomberg. |
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