Talk about sticker shock.
Cubans are flocking to Havana car dealerships as a new law takes effect eliminating a special permit requirement that has greatly restricted vehicle ownership in the country. To their dismay on Friday, the first day the law was in force, they found sharply hiked prices, some of them light years beyond all but the most well-heeled islanders.
A new Kia Rio hatchback that starts at US$13,600 in the US sells for US$42,000 in Cuba, while a fresh-off-the-lot Peugeot 508 family car, the most luxurious of which lists for the equivalent of about US$53,000 in the UK, will set you back a cool US$262,000.
“Between all my family here in Cuba and over in Miami, we couldn’t come up with that kind of money,” said Gilbert Losada, a 28-year-old musical director. “We’re going to wait and see if they lower the prices, which are really crazy. We’re really disappointed.”
Cuba’s Communist-run government traditionally has placed huge markups on retail goods and services paid for with hard currency, a policy that amounts to a tax on people who can afford such goods. The practice applies to everything from dried pasta, to household appliances, to Internet access.
The astronomical sticker prices on the cars will likely mean fewer sales and the state leaving money on the table, said Philip Peters, a longtime Cuba analyst and president of the Virginia-based Cuba Research Center.
“There’s a lot more money to be made at lower price points,” Peters said. “It’s a short-sighted tax-man’s mentality... Paradoxically, they mark it up so much that they’re not going to make any money. However, that’s the mentality.”
Havana legalized the sale of used cars by private individuals in 2011. However, longstanding rules remained in place requiring Cubans to obtain a Cuban Transportation Ministry permit to purchase a new or used car from state-run dealerships. Permission took months or years to obtain, resulting in a black market in which car buyers would often quickly flip them for a big profit.
The new law eliminates the need for a permit, but does not allow Cubans to import automobiles directly. The government retains its monopoly on that, and alone decides a vehicle’s market value. Some exceptions will still exist allowing diplomatic missions and foreign entities to import vehicles.
The Ferrari-like price schedules for even mundane new cars are a signal that automotive scarcity and high demand will likely continue to reign in Cuba, which is famous for the 1950s US cars that still rumble through the streets long after they became museum pieces elsewhere.
Because replacing a car is so difficult, those lucky enough to own a finned Detroit classic or a boxy Russian import go to great lengths to keep them on the road as long as possible, swapping in makeshift parts and resorting to creative soldering.
At a used car dealership in western Havana on Friday, there were a few relatively affordable options.
A 1997 BMW was the cheapest vehicle and the first to sell shortly after the dealership opened at 8am It went for US$14,457 to a young man who declined to talk to reporters, so it was not known many kilometers it had previously logged.
However, even many of the used cars had eye-popping asking prices, such as a 2009 Hyundai minivan that listed for US$110,000.
“Let’s see if a revolutionary worker who lives honorably on his salary can come and buy a car at these prices,” said Guillermo Flores, a 27-year-old computer engineer. “This is a joke on the people.”
In the past, permit holders typically bought used vehicles, often former rentals with high odometer readings that went for between US$5,000 and US$8,000. New imports generally sold at about a 100 percent markup before. There was no explanation for the sudden, across-the-board spike in prices.
Most Cubans still earn government salaries that average about US$20 a month, though some make significantly more as musicians, artists, employees of foreign companies and diplomats and doctors sent on foreign missions. Many others get financial support from relatives overseas.
However, some who had managed to scrape together some savings said they are now priced out of the market.
“With these prices ... those who will be able to buy are the privileged, or the bandits,” said Alfredo Boue, a 25-year-old cook. “I think the bandits are not the ones [stealing] in the streets, but the people who set these prices.”
People were aghast and angry as they perused a list of prices posted outside the dealership. Some said it felt like something out of science fiction. One woman asked sarcastically if there were any bicycles, because surely that would be the only thing she could afford.
Priority was given to people who had obtained a permit under the old system, but Antonio Diaz, a 66-year-old retiree who came expecting to pay US$5,000, left empty-handed and disgusted.
“What am I going to do with this letter?” he said, brandishing his now-useless permit. “I can’t buy anything. I don’t have the money. That was supposed to be the car for my old age, which I was going to buy after a lifetime of work.”
“I’ll have to resign myself to living without a car,” Diaz said, shaking his head.
‘IN A DIFFERENT PLACE’: The envoy first visited Shanghai, where he attended a Chinese basketball playoff match, and is to meet top officials in Beijing tomorrow US Secretary of State Antony Blinken yesterday arrived in China on his second visit in a year as the US ramps up pressure on its rival over its support for Russia while also seeking to manage tensions with Beijing. The US diplomat tomorrow is to meet China’s top brass in Beijing, where he is also expected to plead for restraint as Taiwan inaugurates president-elect William Lai (賴清德), and to raise US concerns on Chinese trade practices. However, Blinken is also seeking to stabilize ties, with tensions between the world’s two largest economies easing since his previous visit in June last year. At the
UNSETTLING IMAGES: The scene took place in front of TV crews covering the Trump trial, with a CNN anchor calling it an ‘emotional and unbelievably disturbing moment’ A man who doused himself in an accelerant and set himself on fire outside the courthouse where former US president Donald Trump is on trial has died, police said yesterday. The New York City Police Department (NYPD) said the man was declared dead by staff at an area hospital. The man was in Collect Pond Park at about 1:30pm on Friday when he took out pamphlets espousing conspiracy theories, tossed them around, then doused himself in an accelerant and set himself on fire, officials and witnesses said. A large number of police officers were nearby when it happened. Some officers and bystanders rushed
Beijing is continuing to commit genocide and crimes against humanity against Uyghurs and other Muslim minorities in its western Xinjiang province, U.S. Secretary of State Antony Blinken said in a report published on Monday, ahead of his planned visit to China this week. The State Department’s annual human rights report, which documents abuses recorded all over the world during the previous calendar year, repeated language from previous years on the treatment of Muslims in Xinjiang, but the publication raises the issue ahead of delicate talks, including on the war in Ukraine and global trade, between the top U.S. diplomat and Chinese
RIVER TRAGEDY: Local fishers and residents helped rescue people after the vessel capsized, while motorbike taxis evacuated some of the injured At least 58 people going to a funeral died after their overloaded river boat capsized in the Central African Republic’s (CAR) capital, Bangui, the head of civil protection said on Saturday. “We were able to extract 58 lifeless bodies,” Thomas Djimasse told Radio Guira. “We don’t know the total number of people who are underwater. According to witnesses and videos on social media, the wooden boat was carrying more than 300 people — some standing and others perched on wooden structures — when it sank on the Mpoko River on Friday. The vessel was heading to the funeral of a village chief in