40 brands and about 300 models crowded into the venue: the "lack of accessories" problem behind the recovery of Venezuela's auto market

A rather contradictory phenomenon is emerging in the Venezuelan automobile market: vehicle imports are resuming, brands and models are becoming more and more abundant, but local parts manufacturing capabilities continue to shrink. More and more imported models may face "cars without parts" in the future. The problem of repair...

According to Omar Bautista, chairman of the Venezuelan Chamber of Automobile Products Manufacturers (Favenpa), a rather contradictory phenomenon is emerging in the Venezuelan automobile market: complete vehicle imports are resuming, brands and models are becoming more and more abundant, but local parts and components manufacturing capabilities continue to shrink, and more and more imported models may face the problem of "having a car but no parts to repair" in the future.

Favenpa data shows that in the past five years, Venezuela's imports of auto parts similar to domestic productshave increased by 117%; during the same period, about 22 auto parts factories have closed. Bautista believes that the large number of imported parts entering the market, insufficient supervision, and the tax burden difference between imported products and local companies are important reasons for the squeeze on local auto parts manufacturing.

For example, he cited that some imported parts and components donot need to bear import tariffs, value-added tax (IVA), large financial transaction tax (IGTF) and some local taxes and fees, which puts locally produced parts and components at a disadvantage in price competition and gradually puts their market share. Replaced by imported products.

At the same time, the Venezuelan vehicle market has become significantly active. Favenpa expects that Venezuela willimport at least 70,000 new carsin 2026, of which about 10,000 will come from United Arab Emirates channels. Currently, about40 car brands plan to supply vehicles to Venezuela, and the model selection and price range on the market have expanded significantly.

For Venezuela, which has long lacked a supply of new cars, this will certainly help update the old car ownership structure. But the problem also followed: when the car came in, the parts system was not established simultaneously.

Bautista said that thereare about 300 models on sale inVenezuela this year, but the actual sales of many models are very small. The more scattered the models are, the more difficult it is for parts dealers to stock up-holding a separate batch of parts inventory for dozens or even hundreds of vehicles is very inefficient in capital turnover, and it is impossible to determine when these parts will be sold.

This "fragmentation of models" also weakens the willingness of local companies to invest in the production of parts. For auto parts companies, investment in molds, equipment and supply chains can be economically meaningful only if a sufficient scale is formed. If a brand introduces many models and sells only a small number of vehicles per model, it is easy to end up with insufficient after-sales coverage.

This is particularly worthy of attention for China automobile and used car exporters. The Venezuelan market now seems to be resuming imports. If we only look at it from the perspective of "lack of cars", there is indeed an opportunity; but when dozens of brands and hundreds of models enter at the same time, and the number of each car is limited, the after-sales risks of unpopular models will be rapidly amplified. For end consumers, purchase prices are thousands of dollars cheaper, which may quickly be offset by waiting lists for follow-up repairs and high-priced parts.

Venezuela actually already has relevant regulatory requirements. Bautista said current regulations require car importers to guarantee a supply of parts for up to 10 years and use a certain proportion of domestically produced parts in vehicle assembly. However, Favenpa believes that the government's follow-up supervision of these requirements is not adequate.

Local manufacturing also faces practical difficulties. In addition to import competition, frequent and long-term power outages in Venezuela's industrial zones have also seriously affected the production of auto parts companies that are still operating. This further weakens the resilience of local supply chains.

written in the end

The biggest contradiction in the Venezuelan auto market at present can be summarized as "more and more cars are, but after-sales sales are becoming more and more fragmented." 70,000 new cars, 40 brands, and about 300 models a year sounds lively, but on average after a single model, many products simply cannot support a stable inventory of parts. For China used car exporters, it is best to give priority to models with large domestic ownership, high component versatility, and mature maintenance technology, and determine the supply of wearing parts and accident parts with local importers in advance. Venezuela may not only lack cars next, but also a post-market system that will allow these cars to continue running.

Source: Guangdong Good Car

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