Cuba's New Auto Sales Policy Is A Total Flop

Cuban Government Car DealershipREUTERS/Enrique De La OsaCar shoppers outside of a Cuban government owned car dealership in Havana

In the first six months since the Cuban government implemented a policy that would allow average citizen to buy cars without special permits, the country’s 11 million inhabitants bought a grand total of just 50 cars and four motorcycles from government-sanctioned dealerships, reports Reuters.

Why? Because cars in Cuba are insanely expensive. While the average Cuban state worker makes roughly $US20 a month in salary, one Peugeot dealership in Havana is asking $US91,000 for a discontinued 206 economy car and a whopping $US262,000 for a new 508 family sedan.

For perspective, at $US262,000, the Havana Peugeot dealer is asking more for a family sedan than its American counterparts are asking for a Bentley Continental GT ($180,000) or Ferrari 458 ($234,000), and a price on par with a new Rolls-Royce Ghost ($263,000).

In comparison, a new 508 can be had for a little as $US29,000 in the UK, with some used 206 models available for little more than $US1,000. The new law, implemented as a means to raise funds to bolster the country’s antiquated public transportation system, has led to a staggering 400% mark up over prices before it took effect in January.

“We’re speechless, it’s a big surprise. I don’t know what the government’s strategy is,” Antonio, a Cuban car buyer, told the BBC in January. “Maybe this is just a test phase, but the prices are excessive.”

Suzanne, another shopper, remarked to the BBC, “The prices are crazy. No Cuban who works for the state can afford to buy at that price. They have zero chance of getting a car.”

Peugeot 508 Saloon (front)Newpress UK/ Peugeot2013 Peugeot 508 sedan

So far, the Cuban government has generated $US1.28 million in revenue from the sale of cars and motorcycles with an average transaction cost of $US23,700. However, it should be noted that a large portion of these sales have been in the form of second-hand ex-rental cars.

The 508 in question is Peugeot’s latest mass market mid-sized model available throughout the world(except the U.S.) in sedan and wagon form. In production since 2010, power for the practical 508 comes from a variety of gasoline and diesel hybrid power plants that range from an economical 1.6 litre four cylinder to the range topping 2.2 turbodiesel.

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