Toyota stops Venezuela car production due to falling sales image

As the South American country has big issues with the shortage of hard currency and car sales were consequently hard hit, Toyota has decided to suspend car production in Venezuela from February 13.

According to Shino Yamada, a Toyota spokeswoman, the actual problem that triggered the planned production stop has to do with a delay in receiving customs clearance for parts, but also added that output resumption has not been planned.

According to a report from the Caracas-based automotive chamber of commerce Cavenez, in January car sales in the country reached 722 vehicles – falling sharply by 87% from a year ago. Ford, another local producer, also announced last month it decided to cut back on production in Venezuela as the US currency availability made it almost impossible to pay suppliers. According to Cavenez, while Toyota sold 225 cars in January, which is around a third of the country’s total, Ford only sold two cars in the same time.

“The foreign exchange system is totally paralyzed, and if they’re not going to give dollars to import food and medicine, they’re obviously not going to assign dollars to car part importers,” said Henkel Garcia, director of Caracas-based consulting firm Econometrica.

According to Ford’s Chief Operating Officer Mark Fields, car output in Venezuela will remain close to its fourth-quarter level, when production was reduced by 75% from the first three months of the year.

Via Bloomberg