CARACAS, VENEZUELA: The Caracas government has announced that the French car company PSA Peugeot Citroen will assemble vehicles in Venezuela from the end of next year.
Peugeot will start manufacturing cars in Venezuela. Image: Peugeot
Industry Minister Ricardo Menendez said that the plan was a "strategic alliance" that would allow for the creation of a joint venture between the Bolivarian government (Venezuela) and representatives of Peugeot.
"The plant, with a production capacity of 15,000 vehicles per year, is expected to produce 5,000 cars in the first year for the Venezuelan domestic market," said Menendez.
President Nicolas Maduro said a 51% stake in the local company would go to the state but added that if it was necessary for Peugeot to be the majority stakeholder the "this would be possible."
Limits on car prices
"We are flexible in this alliance. The important thing is for cars to be produced in this country so that we advance in car manufacturing technology," he said.
Maduro also signed a decree under new emergency powers to set limits on car prices, both new and used, in a bid to stem speculation in the car market.
Because of strict currency controls, new imported cars are scarce and expensive in Venezuela. So used cars are highly sought after and actually appreciate in value over time. Some people buy them as an investment hedge against inflation.
Congress gave Maduro emergency powers to act by decree three weeks ago. He has already ordered price cuts for domestic appliances and limits on business profits.
This comes as Venezuela prepares for local elections this coming Sunday (8 December). They are seen as a test of the popularity of Maduro, who was elected in April after his predecessor Hugo Chavez died of cancer.
Source: AFP via I-Net Bridge