Sector Plummets- No Let Up In Sight
Vehicle production in Venezuela declined 84.8% year-on-year (y-o-y) in January, to 296 units, with many autos manufacturers stopping output, as the domestic market drops and the country's business environment deteriorates. BMI forecasts a 95% drop in output over the year, as we believe further declines are likely as carmakers curtail production.
Production Outlook Increasingly Bearish
BMI has long maintained a bearish on vehicle production in Venezuela, as the government continues to intervene in the economy, further restricting access to foreign currency and implementing import restrictions on vehicle components. The ongoing weakness in the currency will serve to make supplier imports more expensive, exacerbating shortages of components. Furthermore, the worsening business environment makes operating profitably in the country increasingly difficult as the government seeks to limit profit margins for companies.
|BMI Increasingly Bearish As Imports Dwindle|
|Venezuela Vehicle Sales, Imported And Domestically Produced, Units|