Can you imagine a market in which the prices of products were set not by manufacturers, but from the state? Well, if you’re doing business in Venezuela, you might need to get used to the idea, as president Nicolas Maduro said he’ll regulate the price of new and used cars in order to fight record inflation.
The law he intends to pass on will allow the government to set car prices, require manufacturers to provide weekly production figures, ensure that used car prices don’t exceed new car costs and provide licenses to individuals to import a vehicle using an account in euros or dollars with a state bank.
“The vehicle is produced for who? For society’s need, not for the mafias that control it. We’re going to regulate from the factory door to the place of sale,” Maduro said on December 2 in a national radio and television address.
This is the latest in a series of populist measures adopted by the government ahead of local elections on December 8. Last month, Maduro occupied a packaging plant he accused of raising prices, capped costs for commercial real-estate leases and forced price reductions at electronics stores using the military.
In January, the national assembly introduced legislation to fix prices for new and used cars, which many Venezuelans use as a shield against inflation. This is why South America’s largest oil exporter is one of the few countries in the world where automobiles typically gain in value the moment they are purchased.
In October, annual inflation rose to a mind-boggling 54 percent, the highest rate in 16 years.
By Dan Mihalascu
Story References: Bloomberg
The car in the photos is the Fiat Siena-derived Dodge Forza, assembled in Venezuela
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