By on July 2, 2014

Cuban Yank tank

Last year, the Cuban government finally made it legal for its citizens to freely buy new vehicles for the first time since Fidel Castro sent Fulgencio Batista packing in 1959. The people rejoiced right up until they saw the prices on the showroom floor this January, family sedans marked up 400 percent or above as if they were Ferraris and Bugattis.

Reuters reports that because of the markup, only 50 cars and four motorcycles left the 11 nationalized lots in Cuba during the first six months of 2014, netting a total of $1.28 million USD in new car sales. The high prices also affect foreign businesses and potential investors, all none too thrilled to seek government permission to import their own vehicles without going through the national showroom floor.

In one example cited by the news organization, a Havana Peugeot dealership wanted $91,000 for a 2013 206, and $262,000 for a 506 of similar vintage, which makes the government’s goal of investing 75 percent of all new-car sales into public transportation easier said than done; most state workers make the equivalent of $20 USD per month.

Meanwhile, used car sales are doing much better, with the average price for a used vehicle — including motorcycles — holding at $23,759. Most of the used stock originates from retired rental car fleets.

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19 Comments on “Cuban New-Car Sales Total 50 During First Half Of 2014...”


  • avatar
    HerrKaLeun

    I’m sure the big wig communist party leaders and secret service employees got their new cars without having to go to the dealership. So cuba may actually have imported more then 50 cars.

    And Cubans aren’t ready yet to throw their government into the sea? i really believe if the US ended the embargo and goods and people could freely travel to Cuba (busting all the myths and lies the communist government tells them), the system would implode within a week. The embargo is the only reason the communists are still in power. they need an outside enemy to survive and blame everything on.

    • 0 avatar
      Onus

      There is some dumb US law that doesn’t allow the embargo to be lifted when a castro is in power. Lucky for us Raul is retiring shortly so no more castros.

      I’m with you lifting it will do all the damage necessary.

      Funny thing is prior to communism cuba was a powerhouse in the Caribbean.

      I always think back to the Spanish American war and wonder what Cuba had been annexed by the US instead of granted independence. It’s all that Senators fault for creating a law to disallow it (teller amendment). From what i know most US politicians didn’t think Cuba was ready to govern themselves. But, they didn’t have a choice.

      I imagine it would be much like Puerto Rico except much more prosperous.

      • 0 avatar
        onyxtape

        I think the Hawaiian tourism board also has an opinion on this matter.

      • 0 avatar
        Kenichi Mifune

        I beg to disagree.

        There is no embargo in place in Venezuela, and despite being an oil rich country, it’s going down the way of Cuba under the chavista dictatorship.

        I’m willing to bet lifting the embargo would do nothing to improve Cuba’s situation. A few well placed bombs would though. And while you are at it, a few more over here wouldn’t do any harm.

    • 0 avatar
      jpolicke

      Yet we can’t send the Chinese enough of our money.

    • 0 avatar
      kmoney

      Possibly, I would posit that if the communist system collapsed there it would probably go down like it did in most post-communist states. The current powerbrokers and owners of the means of production appropriate the things they once controlled on behalf of the state for themselves and become rich, while the rest keep eking out their subsistence livings working for these new private entities.

      The big problem for Cubans in general would be that they are still poor, even if they left the communist system. I can only imagine the kinds of market corrections that would occur with foreign investment and ownership. People do freely travel to Cuba, Europeans and Asians just as often as Canadians, and most Cubans know what goes on in the rest of the world, they just largely shut up and accept the status quo.

    • 0 avatar
      healthy skeptic

      @HerrKaLeun

      >> I’m sure the big wig communist party leaders and secret service employees got their new cars without having to go to the dealership.

      I wish we in America were free to do the same. Dealers here might not be state-owned, and might not charge quite such outrageous markup, but the protectionist laws they enjoy here are worthy of Communist Cuba.

      >> i really believe if the US ended the embargo and goods and people could freely travel to Cuba… …the system would implode within a week.

      Maybe not a week, but I definitely agree that the silly embargo has done more to keep the Castros in power than just about anything else.

      Think what would have happened if we had lifted the embargo right at the end of the Cold War. It was the perfect time. Communism wasn’t a threat anymore, and the loss of Soviet subsidies would have made the Cubans even more hungry for trade with America, By now, a quarter-century later, you’d probably have a Cuban middle class, and a well-educated, worldly population with close ties to the U.S. and the free flow of information and ideas. Even if Castro had managed to cling to power, he’d have been severely weakened, and Cuba would have been in a much better position to adopt democracy when the time came.

      • 0 avatar
        darkwing

        That assumes that Castro would have similarly opened up his market, which I think was unlikely.

        • 0 avatar
          psarhjinian

          “That assumes that Castro would have similarly opened up his market, which I think was unlikely.”

          Castro is a lot more pragmatic then he’s commonly given credit for; he has to be, it’s not like he has Soviet or Chinese resources at his disposal, and does have a ideologically-opposed superpower parked right next. It would be much, much different were Guevara, not Castro, in charge.

          I don’t think he would have had much of a choice; Cuba is literally hamstrung by an inability to trade with anyone, nation or corporation—and that’s an American restriction, not a Cuban one. I’m sure there’s a market for Cuban sugar and Cuban doctors and Cuban tobacco and Cuba coffee. It’s sitting less than a couple of hundred miles away. But it can’t get there.

          In a way, American policy to Cuba has been Castro’s best friend; You can’t sell goods to Cuba, you can’t bring product back. Nothing.

          You can’t even run cable from the US mainland to Cuba, so everything is via microwave. It’s easier to get information into and out of Iran or North Korea: they’re better-connected.

          • 0 avatar
            Pch101

            I believe that one of you is referring to Fidel, while the other is talking about Raul.

            Raul Castro seems to be on more of a reformist path than his old school brother Fidel. Raul seems to understand that living off of crumbs and deferred maintenance isn’t sustainable over the long run.

          • 0 avatar
            psarhjinian

            I don’t believe Fidel is particularly old-school, either. Guevara certainly was, Fidel less so, especially as he aged.

  • avatar
    CJinSD

    >>In one example cited by the news organization, a Havana Peugeot dealership wanted $91,000 for a 2013 206, and $262,000 for a 506 of similar vintage, which makes the government’s goal of investing 75 percent of all new-car sales into public transportation easier said than done; most state workers make the equivalent of $20 USD per month.<<

    Sounds like they have the same quality of leadership that California does.

  • avatar
    SilverCoupe

    I bet they can’t wait until the embargo is eventually over so that they can go out and buy nice newly restored 1958 Chevrolet Bel Airs or Biscaynes to replace their old ones.

  • avatar
    Xeranar

    I’m seeing comments here making arguments about Communism and the low real wages of workers. I would point out that Cuba is an agrarian state, they barely qualify to have light industrial output and when the US decided to put the embargo on them collapsed their economy which has never recovered. In general, if Cuba had their embargo lifted and the free export of agrarian goods (mainly sugar) was started once more their GDP & real wages would climb significantly, still pale in comparison to the US but be on par with other agrarian Caribbean nations. Though that number in itself vastly differs between US protectorates & Territories and autonomous and independent regions.

    • 0 avatar
      psarhjinian

      Cuba is interesting: it’s in no great a state economically in absolute terms, but compared to a lot of other LatAm states, it really isn’t that badly off, especially in quality-of-life/life-expectancy/crime/violence. It hasn’t climbed the heights, but it hasn’t plumbed the depths, either.

      You’re generally safe to walk through Havana in ways you wouldn’t be able to in any other Central American capital save for San Jose in Costa Rica. You’re also less likely to see the kind of abject misery you’d see other places, too.

      Actually, Costa Rica is probably the only state that, in holistic terms, does better than Cuba. Just coincidentally, it’s also the only state that hasn’t been janked with by the United States.

      Lifting the embargo would have been a really smart move: you’d have a populace that’s educated, healthy, benefitting from decades of no civil wars and ready to hit the ground running; basically, another Costa Rica. Communism would likely have passed away peacefully a la Poland.

    • 0 avatar
      Pch101

      There are more than 180 countries on the planet. Cuba is free to trade with all of them, but one.

      Then again, it’s a communist economy. Being surprised that a communist nation doesn’t participate in free trade is about as odd as expressing shock that atheists don’t go to church on Sundays. Communism and free trade don’t exactly go together; communists don’t believe that trade has any virtues.

      In any case, this isn’t an example of Cuba opening its marketing, so much as it is an effort to obtain hard currency. They want to buy cars and flip them so that they can use the resulting currency exchange to support their economy, since their own currency isn’t worth a damn.

      • 0 avatar
        onyxtape

        Why wouldn’t they engage in trade? It’ll just be done at a state level (see China and the Soviet Union). They had Lada dealers in Canada in the 70s. Cuba’s largest trading partners are the Netherlands, Venezuela and Canada.

      • 0 avatar
        psarhjinian

        “There are more than 180 countries on the planet. Cuba is free to trade with all of them, but one.”

        Yes and no. Helms-Burton put a definite chill on the willingness of organizations in those countries to trade with Cuba; many saw that as a choice: trade with Cuba, or be able to do business in the United States. Pick one.

        Cuba can trade with whomever they like, but it’s risky for a non-Cuban shipping company to do business with Cuba if they want to do business in America or with an American company, or for a non-Cuban buyer of sugar, or a telecom provider, etc, etc.

        Admittedly, Helms-Burton keeps getting suspended, but it did give people pause: do business in Cuba, find your American assets the subject of a suit.

        The other issue for Cuba is that it’s kind of silly that it can’t effectively trade with it’s largest potential partner. It’s an largely agrarian economy that produces the same things it’s neighbours do, except that, unlike it’s neighbours, it can’t exactly sell anything it makes.

        Communism is certainly part of it, but American intransigence just makes it worse.

        • 0 avatar
          Pch101

          The Cubans don’t make many products that they can sell.

          The Cubans don’t make many products that they can sell because they have essentially criminalized the profit motive that is needed to provide the incentive to be productive.

          Communism is based upon the premise that people will produce because it’s the right thing to do for the community. As it turns out, that’s a bad theory that leads to very little getting done. People need to earn some combination of cash and self-actualization if they are going to be their best.


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