Venezuelan President Hugo Chavez ordered an investigation of Toyota Motor Corp, saying the world’s largest carmaker “can leave” should it fail to meet production quotas and technology-transfer laws.
Toyota has refused to make four-wheel drive models used for public transportation, Chavez said in comments on state television yesterday. Chavez said he will impose a production quota for the cars, which are used to ferry residents into Caracas slums.
“I’m ordering an investigation into Toyota, to see how it is that they don’t want to assemble these cars,” Chavez said. “We have to force them to, and if they don’t want to, they can leave.”
Chavez has nationalized foreign oil, utilities and metals companies in his 10 years in power while vowing to transform Venezuela into a socialist state. US automakers General Motors Co and Ford Motor Co also haven’t shared technology and can be replaced by Russian and Chinese companies, Chavez said.
Toyota spokesman Paul Nolasco said he is unaware of the situation and could not immediately comment when reached by phone in Tokyo. Venezuela will expropriate the factories of firms that don’t follow government regulations, Chavez said.
Toyota has one plant in Venezuela that was established in 1981 and builds models including the Corolla compact, Land Cruiser sport-utility vehicle and HiLux truck, spokesman Hideaki Homma said. The factory produced about 13,000 vehicles in 2008 employed 1,899 workers as of March 1, he said.
GM, Ford, Toyota and Chrysler have the biggest market shares in the OPEC nation, which is Latin America’s largest oil producer.
“We’re not interested in these traditional companies that have been here 50 years or more, they’ve never transferred technology,” Chavez said. “I suggest they gather their things and go, and we’ll bring in the Russians, Belarusians and Chinese who want to make cars here.”
Car production and sales plunged this year after labor strikes and government delays in approving dollar sales to companies to import spare parts and assembled vehicles. New car sales dropped 40 per cent in November from a year earlier and output fell 17 percent through the first 11 months of the year.
Venezuelans bought a record 491,899 vehicles in 2007 during an oil-fueled consumption boom with low interest rates and government subsidized programmes. Car sales dropped to 126,533 units through November this year.
Under restrictions imposed by Chavez in 2003, the government controls the sale of dollars at the official exchange rate of 2.15 bolivars. The government restricted dollar sales to companies this year to save reserves after oil revenue plunged.
GM, the market leader in Venezuela built up a $1.2 billion debt with Asian suppliers this year due to delays in dollar sales from the government.
Venezuela’s economy, the third-largest in South America, contracted 4.5 per cent in the third quarter led by a 9.4 per cent drop in manufacturing and a fall in private consumption.
Chavez made yesterday’s announcement during an event to sell Volkswagen AG cars imported by the government from Argentina at lower prices than dealerships owned by foreign automakers.
The government is selling cars, clothing and food through a new socialist market network to reduce inflation and undercut prices of “capitalist” companies, Chavez said.
Venezuela had annual inflation of 28.6 per cent in November, the highest of 78 economies tracked by Bloomberg.
