Ford fights currency issues in Venezuela by selling cars in dollars image

Ford Motor, the second largest US automaker, will begin delivering some of its models in Venezuela in exchange for dollars in a bid to fight the shortage of the US currency that has affected imports and cut production at its local factory.

The news comes courtesy of a labor official, Gilberto Troya, the leader of the Ford Motors de Venezuela labor union, with the automaker having made an agreement with the country’s government at the end of April. The official believes the move would be followed by other companies, which in turn could change the automotive sector into one driven by the US dollar, not the local currency- the bolivar. The agreement will have customers pay their new cars with dollars, with the dealerships then transferring them internally to the company that would use the proceeds to ensure a better inflow of the currency towards imported parts needed for the assembly of the vehicles being built at the Valencia facility. The bolivar would only be used for the purchase of more affordable Ford models, such as the Fiesta subcompact, added the labor executive.

Ford again stopped Venezuela production this month as it lacked the necessary dollars to import the needed parts – the dollar cap has been brought by tight local currency controls and lower oil sales for the OPEC member. The shortage of US currency has affected numerous industrial sectors, from the automotive to paper, causing production stoppages and the biggest country recession across Latin America.

Via Bloomberg