Is Cuba the smallest market in the world at 50 sales in 6 months?

Picture by Teemu R. All rights reserved.

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In October 2011 I reported that car purchase was finally legalised in Cuba after over 50 years of tight restrictions country-wide. However at the time I had expressed reservations as to how much new and used car sales in Cuba could grow given the average monthly salary in the country is just 17 dollars. Turns out I was on the money… The 2011 law change affected car purchases between Cuban consumers and last January all restrictions on vehicle purchase were lifted, meaning importing companies can now start doing business in the country.

According to South African website iol.co.za, citing the official website Cubadebate.com, itself citing Iset Vazquez, vice president of the state enterprise Corporacion CIMEX, Cuban dealers sold just 50 cars and 4 motorcycles across the country in the first six months of 2014! That’s old and new combined! Quite an unbelievable result that actually has a very simple explanation. Upon import into the country, it would appear that sticker prices are marked up a staggering 400% or more, pricing family sedans like European sports cars. To its defence, the Cuban government reportedly said it would invest 75% of the proceeds from new car sales in its woeful public transportation system.

Even more troubling, most of the sales so far this year appear to be 2nd hand, and even then they are pricing just about every living Cuban out of the market for a car. A few examples: a 2013 Peugeot 206 (a model originally launched in 1998) was priced at $91,000 in Havana while the larger 508 would set you back wanted $262,000. Not even in Singapore are prices so high.

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