Cuba sells just 50 cars in first six months after ban lift

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Old American Classic Cars In Central Havana, Cuba.

Cuba is known as a nation that loves its cars. After the 1959 Cuban Revolution, the government made it nearly impossible to obtain a new vehicle. So Cuban drivers kept their '50s classics on the road even through today. Given this automotive enthusiasm, you might be surprised to learn that since the country began freely allowing new vehicle sales in January just 50 cars and 4 motorcycles have been sold through its 11 national dealers.

The meager sales don't appear to be from a lack of demand; it's the huge markups on the cars in showrooms that are keeping them out of consumer's hands. According to Reuters, the national dealers made $1.28 million in the first six months of the year, an average transaction price for the 54 vehicles of about $23,700 each. That might not so bad initially, but the average Cuban worker pulls in about $20 a month. Also, those prices are almost reasonable compared to earlier reports of a Peugeot retailer trying to sell a 508 sedan for $262,000 or a 2005 Renault for $25,000.

Hopefully, consumers don't have to endure this price gouging for long. This could be just the latest step in the long process of opening up the country's vehicle market. After all, it was only in 2011, that citizens could finally more easily sell used cars made after the revolution, according to Reuters. The people there have been able to keep their classics on the road for over half a century. What're a few more years so that the situation can possibly improve further?

Cuba sells just 50 cars in first six months after ban lift originally appeared on Autoblog on Thu, 03 Jul 2014 19:15:00 EST. Please see our terms for use of feeds.

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400% markups reported as Cuba opens new/used car sales for first time since 1959

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One could hardly blame Cuban consumers for suffering from a bout of 'sticker shock' when new car shopping this week - after all, they haven't had the opportunity since 1959. But it isn't just a half-century of inflation that buyers are having to wrap their heads around this week, it's massive markups.

Reuters is reporting that with the Cuban state opening up the sale of new vehicles without special dispensation, price markups of 400 percent and more are turning away would-be shoppers in droves. In a country where average monthly wages total just $20, you can imagine the shock and incredulity that is accompanying word of a state-run Peugeot dealer asking $262,000 for a 508 - a D-segment model that typically lines up against cars like the Ford Mondeo.

And it's not just new cars that are suffering from the markups - Reuters interviewed Cuban artist Cesar Perez, who was looking at an unspecified 2005 Renault. The used car lot's price was $25,000, where similar models trade for just $3,000 outside of the island nation. "These prices show a lack of respect for all Cubans. What is here are wrecks. I now have no hope of getting a car for my family," he said.

The price gouging is being viewed by at least one analyst, John Kirk, a Canadian academic expert on Latin America, as a "luxury tax imposed by the government on the nouveau riches of Cuba." No matter what it is, with such heady prices, Cuba's venerable culture of keeping old automobiles alive by whatever means are available seems unlikely to change any time soon.

400% markups reported as Cuba opens new/used car sales for first time since 1959 originally appeared on Autoblog on Sat, 04 Jan 2014 13:01:00 EST. Please see our terms for use of feeds.

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Investing in blue-chip classic cars has been lucrative this decade

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Classic car values have been increasing quickly in the past decade.

There's always a financial risk with investing in collectibles - and that includes cars. They must be maintained and stored, which costs more money, and ultimately sold (they're investments, right?). On top of that, if they're driven, they can be damaged or just lose value with more miles. But lately, the rate of return from investing in some collectibles - particularly classic cars - has been much higher than that of traditional investments, The Economist reports.

According to an index of the 50 most valuable automobiles compiled by the Historic Automobile Group and cited by The Economist, the past decade has been a great time to invest in blue-chip classic cars. Since 2002, their value has risen by almost 450 percent, which is a much larger increase than that of the MSCI World index, an index of stocks in developed markets, which increased by a relatively paltry 147 percent during the same period.

A case in point, The Economist points out, is one of the most expensive, ultra-rare classic cars to be sold at auction this year at Pebble Beach: a 1957 Ferrari 250 GT 14-Louver Berlinetta that sold for $9.46 million. The gavel price was within the car's estimated price range of $9 million to $11 million. An even better case in point at Monterey Week this year was the 1967 Ferrari 275 GTB/4 NART Spider that sold for $27.5 million, a record sum for a car sold in the US - the second-highest price paid for a car at auction ever. On top of that, it beat the high end of its presale estimate by over $10 million! The most expensive auction car ever remains Juan Manuel Fangio's Mercedes W196R F1 racer, which sold earlier this year for $29.65 million. Last year, a 1936 Mercedes-Benz 540K von Krieger Special Roadster was auctioned off for almost $12 million. In 2011, a 1957 Ferrari Testa Rossa prototype sold for over $16 million. You get the picture.

But if you're not into making money on classic cars, then maybe you should start a collection of stamps, coins or violins, all of which have been increasing in value for the past decade. Or just go to work.

Investing in blue-chip classic cars has been lucrative this decade originally appeared on Autoblog on Tue, 03 Sep 2013 16:31:00 EST. Please see our terms for use of feeds.

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