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realclearworld

‘Cuba Experts’ explain the Castro mafia’s noble reason behind 400% markup on auto sales

The headlines blaring earlier this month that Cuba's dictatorship only managed to sell 50 cars in six months was certainly an embarrassment for all those who either ignorantly or maliciously support the apartheid Castro regime. After all the hoopla they generated celebrating dictator Raul Castro's reform technically allowing Cubans to legally buy cars for the first time, reality once again conspired against them. The first hit came when the regime announced their prices for these cars, which reflected a 400% markup over retail. Basically highway robbery both figuratively and literally. Then came the not so unexpected announcement that the regime's sales of new cars for the first six months were even less than paltry.

So what do "Cuba Experts" do when faced with yet another public relations disaster for their revolutionary mafia employers in Havana? Why they just assign a noble reason to the criminal activity. You see, the Castro mafia is not doing what it has always done for a half-century and marking up cars 400% to rip off customers. To the contrary, the Castro mafia, which has raped and pillaged Cuba and various other countries (Venezuela the latest) is only looking to make extra cash so they can build roads and bridges and feed and shelter the poor.

Via AP in The Miami Herald (emphasis mine):

Paltry car sales seen as sign of Cuba's priorities

http://media.miamiherald.com/smedia/2014/07/11/00/04/78-13ru0K.St.55.jpegHAVANA -- It's not your typical used car lot.

Just steps from the Florida Straits, dozens of vehicles sit covered in grime and baking in the Caribbean sun. An elderly security guard slumps in a sleepy waiting area, and customers are nowhere to be seen.

A price list hanging on the green chain-link fence hints at why: $85,000 for a 6-year-old Peugeot compact; $46,000 for a tiny 2008 Citroen C3 hatchback that would cost less than a third of that in Europe. Elsewhere, a larger, new Peugeot 508 lists for $262,000, five times its price in Britain — and more than a millennium worth of paychecks in Cuba, where wages average about $20 a month.

The euphoria that greeted a January reform that lets Cubans buy vehicles from the government without a special permit for the first time in decades turned to anger when the prices were posted. When authorities announced recently that just 50 cars had rolled off the lots of state-run dealerships in the first half-year, bringing in $1.3 million in sales, it was tempting to call the policy a failure.

But analysts say it seems the measure was designed to work that way.

"At those prices, they obviously didn't want to sell many cars," said Philip Peters, president of the Virginia-based Cuba Research Center. "And they're not."

[...]

Jorge Pinon, a Latin America energy expert at the University of Texas, said Cuba's reluctance to sell cars isn't out of fear of insufficient fuel. The country gets tens of thousands of barrels of oil a day on preferential terms from Venezuela.

But Pinon noted that a huge infusion of vehicles would test the creaky transportation infrastructure of Cuba, where potholes can go unfilled for years and traffic lights are scarce.

Peters suggested officials simply don't see it as a priority and would rather spend what little hard currency available on things like food and industrial inputs.

"I think there's only one explanation ... the government does not want to use its foreign exchange reserves to import cars for a retail market," he said. "So therefore the only way that it's worth it to them, to import a car for $20,000 and then sell it retail, is to soak up $50,000 worth of liquidity."

Read it all HERE.

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