#CubaCars

Last Friday, for the first time since the communist revolution there more than 50 years ago, Cubans were able to buy new and used cars without government permission, as state owned dealerships started retail sales, but residents of the island were disheartened by markups of 400% or more that the government is framing as a luxury tax. Cubans walked away from the Havana Peugeot dealer, a state-run enterprise, shaking their heads in disgust after seeing sticker prices ranging from the equivalent of $91,000 for a 2013 206 to $262,000 for a 508. For comparison, in the UK most 508s sell for less than $42,000. That’s quite a substantial additional dealer markup. Eighty percent of employed Cubans work for the state and the average wage in the country is about $20 a month so the cars area still out of reach to the vast majority of Cubans. The tens of thousands of small private businesses that have sprung up since the introduction of economic reforms have a great need for vehicles, but they too have been priced out of the market. At those prices, don’t expect Cuba’s fleet of old American iron to be taken out of service any time soon.