Photo: Ford
After reducing production output in January on account of US dollar shortage, the Blue Oval's assembly operations in Venezuela have taken a new shunt due to the government's dramatic foreign currency control.
Simply put, Ford's Valencia plant will be paralyzed until June due to the shortage of Washingtons needed for importing the components required for assembly.
However, there's a small chance for operations to go back to normal. Venezuelian transport minister Haiman El Troudi will reportedly arrange a meeting between government and Ford officials to find a solution to this production crisis. El Troudi also hinted at releasing $20 million in debt to Ford until the end of the current week.
That would be a much-needed change for the Blue Oval if you take into account that Ford managed to build a little over 500 vehicles in the first four months of 2014. Other big players from the auto industry such as Fiat-Chrysler Automobiles, General Motors, Toyota and Mitsubishi have been affected by the foreign currency shortage.
Some eleven years ago, the South American country blocked capital outflows by controlling foreign currency through the medium of three different exchange rates depending on the industry. But the biggest and sharpest thorn in Venezuela's auto industry is what president Nicolas Maduro did at the end of last year.
Following a staggering 60+ percent drop in vehicle sales volumes and unprecedented levels of inflation, Maduro signed a legislation that gave the Venezuelian government complete control over new and used cars prices.
However, this legislation made things much worse for the auto industry: between January and April, carmakers with operations in Venezuela assembled a little over 3,400 new vehicles, which translates in a three quarter drop in production compared to the first quarter of 2013.
However, there's a small chance for operations to go back to normal. Venezuelian transport minister Haiman El Troudi will reportedly arrange a meeting between government and Ford officials to find a solution to this production crisis. El Troudi also hinted at releasing $20 million in debt to Ford until the end of the current week.
That would be a much-needed change for the Blue Oval if you take into account that Ford managed to build a little over 500 vehicles in the first four months of 2014. Other big players from the auto industry such as Fiat-Chrysler Automobiles, General Motors, Toyota and Mitsubishi have been affected by the foreign currency shortage.
Some eleven years ago, the South American country blocked capital outflows by controlling foreign currency through the medium of three different exchange rates depending on the industry. But the biggest and sharpest thorn in Venezuela's auto industry is what president Nicolas Maduro did at the end of last year.
Following a staggering 60+ percent drop in vehicle sales volumes and unprecedented levels of inflation, Maduro signed a legislation that gave the Venezuelian government complete control over new and used cars prices.
However, this legislation made things much worse for the auto industry: between January and April, carmakers with operations in Venezuela assembled a little over 3,400 new vehicles, which translates in a three quarter drop in production compared to the first quarter of 2013.
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