New Car Sales Begin in Cuba, High Costs Discourage Citizens

January 4, 2014
Renault Clio Hatchback
Whether you're a well-heeled CEO bringing in seven figures a year, or a starving college student subsisting on Top Ramen and PBR, you can find a set of wheels, from a brand-new Rolls-Royce Phantom to a tired, but running mid-90s Chevy Cavalier, and just about anything in-between. If you live in the United States, that is.
For more than five decades, the only way to purchase a new or used car in Cuba was with special government permission. As of the first of the year, special permission is no longer required to buy a new car in Cuba. But astronomical prices listed by the government-owned dealerships discouraged most potential shoppers from considering a purchase. In examples given in a Reuters report, a Peugeot 206 hatchback, which goes for the equivalent of approximately $14,000 in Mexico, was offered for $91,000, and the upscale 508 sedan, which sells for $31,300 in Mexico, was on-sale for $262,000.
The average monthly wage in Cuba is only $20, putting the price of new cars well out of reach of the average citizen. Even late-model used cars are priced outrageously, with a 2005 Renault going for $25,000, available in most other markets for around $3000.
The government promises profits from the sale of new cars would go to public transportation improvements in the country. But with prices for even used cars going for nearly 100 times that of the average yearly wage, expect sales volumes for new and late-model cars to remain modest.


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