Car Sales in Cuba: A Dream Riding Off on Four Tires

By Leonardo Padura* (Café Fuerte)

Havana car dealership. Photo: Raquel Perez

HAVANA TIMES – Following more than a half-century of restrictions, the Cuban market for the sale of new and used cars was opened on January 3rd, under state control. The measure forms part of the social and economic modernization that the government has set in motion, in hopes of obtaining greater efficiency and realism in the country’s marketing and production processes.

But a simple glimpse at the newly circulated list of prices leaves no doubt that the stipulated quantities needed to acquire an automobile are a mirage, beyond the reach of 99 percent of the island’s inhabitants.

The official explanation for offering these vehicles at three, four or even more times their price in other parts of the world is that the money generated will then be used to improve public transportation. This, according to the explanation, will benefit the great majority of the country’s citizens who don’t own vehicles nor have any hopes of owning one, be it at the new prices or at the previous ones.

An exercise of the imagination

While reading and rereading that list of prices, I imagine the face of a Cuban doctor (or perhaps a scientist, an athlete, an artist) who has aspired to realize a transaction as legitimate in the civilized world of the 21st century as that of buying a car. With the publication of that newly established list of prices, they have seen their hopes dissolve in one swift blow.

It’s even easier for me to carry out this exercise of the imagination because I know that doctor – in some cases, because he cured me of an illness; or perhaps because many of them were my classmates, my friends. We shared a row of cane to cut during the harvest, or the gathering of potatoes when we were teenagers and our education included both study and work as integral parts of our humanistic and ideological formation.

That doctor, who could even be a specialist with an advanced degree, perhaps worked on a foreign mission in Africa during the 1980s. I saw and interviewed many such doctors there while I carried out my own mission as a journalist. Perhaps he/she later continued lending their services in other remote parts of the world, a presence that saved lives.

There, in that remote site, the doctor sacrificed his or her own necessities, even those of buying certain foods, in order to save part of the stipend, scraped together – five, six, seven thousand dollars – and return to Cuba and satisfy the need (or illusion) to buy the car that he/she had never owned, or to replace the decrepit Moskvich which he/she has been using to get around for thirty years. The face of that doctor is one of frustration and defeat – that of the death of a dream.

Between those cold numbers on a list and the imagined face, I took the measure of the abyss that separates two realities: one calculated in an office, and the other the concrete daily reality of our lives. They appear to be two separate galaxies with no relation between them.

A simple consideration of the value assigned to the new and used cars in the liberated official market on the one hand, and the economic possibilities of the immense majority of the Cuban citizens – including many of the best trained professionals – on the other illustrates this disconnect. In passing, it also warns us that the altruistic principal of sharing out the benefits of certain compatriots by permitting a few to buy cars so that many others can benefit from efficient public transportation will never come to fruition. Clearly, the theoretical foundation behind the official decision is going to bump up against a simple reality: it’s impossible to maintain fluid and beneficial commerce of an article that has been burdened with taxes so high that they touch the firmaments of the absurd.

Incredulity and Frustration

The argument in the official channels for changing the former policy runs: “The small stock of autos, the restriction of this commodity to a reduced group of selected occupational categories, and the existence of another market that was selling at prices several times higher than those of the established commercial enterprises generated inconformity and dissatisfaction. In more than a few cases, this bureaucratic mechanism had also become a source of speculation and enrichment.”

Nonetheless, the newly patented formula of measures and prices for the sale of automobiles has done nothing more than multiply the dissatisfaction, (taking it to the level of incredulity and even of frustration) while the prices determined by the decision-making bodies are much greater than even the very highest ones under the practices alluded to as “speculation and enrichment.” (These, in many instances, were nothing more than the sale of an acquired automobile in order to satisfy other more peremptory necessities, such as that of obtaining somewhere to live or of improving the living space that one already had.)

This manifest disconnect between the reality in which the great majority of the Cuban population live (including those belonging to that “reduced group of selected occupational categories” who were able to obtain – following much paperwork and investigations – the authorization to buy a car, generally a second hand one) and the reality of the authorities who determine what a citizen should contribute to gain access to certain goods and services, has truly passed the limits of the imaginable this time around.

It’s already known that the price of a cell phone and access to the internet are prohibitive, among the highest in the world, and that even the new fiber-optic cable from Venezuela has brought no reduction. Similarly, everybody knows that products of immediate necessity are heavily taxed.

The currently operating tax law contemplates the payment of 50% of their profits for those who obtain profits over 2,500 CUC (2,800 US dollars) as independent workers. But it’s also true that the state workers earn salaries that average around 20 CUC paid in regular Cuban pesos (25 pesos = 1 CUC).

How can you reconcile these everyday and well-known realities with the list of vehicle prices recently published?  Why hasn’t this topic been touched on (as far as we know) in the recently held forum of the National Assembly?  Why was the elaboration of this list treated as a State secret?

An absurdity on wheels

In reality, such disconnect between realities reaches the absurd when they pretend that the sale of a few automobiles at hugely exaggerated prices will help to solve the endemic problems of urban transportation.  From the reality of my own corner in Mantilla (a neighborhood of Havana), I can observe the many difficulties my fellow citizens face every day. Many of them, through I don’t know through what act of magic, (although I can imagine) must opt for getting around in taxis, paying 10, 20 or more regular pesos a day to earn a state salary inferior to what they needed to pay to get work. How many hundreds of cars can possibly be sold at the established prices, and how many buses will be purchased with that money?

At some junctures it seemed that pragmatism and realism had finally gained headway in the modernization of the Cuban political economy, intended to introduce changes in an economic system tied down by restrictions and structures that had become absurd dead weights.

However, pragmatism and realism have little relationship with these measures designed – they have said – to modernize the supply of vehicles in the country and above all to alleviate the many ailments of public transportation while also bettering the lives of some citizens who had hoped that their work might earn them the possibility of owning a car.

The pretension of having found El Dorado or King Solomon’s mines by selling a Peugeot from last year for a quarter of a million dollars, or a used car at several times more than its highest possible price, is a macabre grimace towards the Cuban citizenry who, with their work and efforts, have desired to bring some improvement to their lives by acquiring an automobile that – even before the new prices – was already a sufficiently expensive item.

I believe that the doctor (doctors) that I know, as well as other colleagues who are artists, or scientists or enterprising small businessmen, or hard-working farmers, today have one less hope to work and live for.
(*) This article appeared in “Padura’s Corner” and was published in Café Fuerte with the author’s permission. We bring you an HT translation.

13 thoughts on “Car Sales in Cuba: A Dream Riding Off on Four Tires

  • Does anyone in Cuba want older USA USED Cars ?
    Is there a Market for them?
    Does anyone already ship automobiles to cuba?

  • What you will get is ?..Cuba. besides it makes no sense. Why would the products be produced in the first place.

  • Right on John, Agent Moses has his negative agenda showing again. (CIA directive 319886)
    I think we could look at this vehicle problem in another light. Yes the whole thing looks silly from the outside. What if the Cuban government wanted to push Peugeot out of Cuba by this action of not letting them make any money? Can they keep a dealership open and not make any money?
    I don’t think anyone can realistically jump from walking or taking a bus to owning a private full size car in a third world country on wages that people make in Cuba. If you look at the law in in the Gazeta it does allow for other types of vehicle to be sold in Cuba. I would bet that soon you will see something like the three wheel Chinese motorcycle 150cc that could easily carry a family of three or four or have some small amount of cargo. (small pickup type unit) If you look on the internet they are selling for about $800.00 to $900.00 US FOB China. Could these be assembled in the new tax free zone at Mariel and sold in Cuba?

  • No but people who through the sweat of their brow, and the sharpness of their mind expand the production of goods or services beyond that of their peers deserve to be recognized accordingly. For example, I don’t begrudge a young Mark Zuckerberg his Lamborghini because he did with Facebook what his peers were not able or willing to do.

  • You’re right Moses, people who work in sweat shops deserve Lamborghinis!

  • You are right about the idea being crazy. If I work harder than you, am smarter than you, I deserve greater reward. To leave my fate to chance steals my incentive to work hard.

  • I have a “crazy” idea that luxury goods should be distributed by lottery. Lottery distribution for goods for which demand outstrips supply is the only way to guarantee equality of opportunity.

  • To be brief, Moses
    The U.S continues its 54 year economic and PROPAGANDA war against the Cuban revolution explicitly to make it a less favored tourist destination among other things .
    The U.S has succeeded in making Cuba less attractive to the world but has failed in overturning the Cuban revolution and reinserting feral capitalism which was /is the goal of U.S hostilities.

  • The embargo does not affect the ability of more Europeans, Canadians and Latin Americans to travel to Cuba, yet less than 3 million of these tourists chose Cuba as a destination. More Canadians, Europeans and Latin Americans visit Disneyworld each year than visit Cuba. It is not the embargo that limits the largest share of tourists to the region. It is competition from the Virgin Islands, Jamaica, Cancun, and the rest of Caribbean vacation alternatives.

  • In 2012 Florida hosted almost 90 million tourists. After the end of the embargo and development of tourism industry in Cuba it is safe to say that under ideal conditions Cuba will receive a similar number of visitors. You say that Cuba would never be able to build so many hotels but with the investment from the US it can. Of cause it would depend on willingness of both the US and the Cuban government to create these ideal conditions.

  • I’m not so sure. Unlike those other countries Cuba has a natural “release valve” for the pressures that build up under a dictatorial government. Ironically it is the United States that has helped keep the Castros in power by facilitating the immigration of the disaffected of Cuban society. What remains is in most respects a politically listless society uninterested in much but the daily struggle for survival.

    In the end what will most likely emerge a a Chinese style of authoritarian capitalism overseen by a military and political clique

  • Almost 3 million foreigners visited Cuba in 2013 from modern countries like Canada, those in Europe, and in Latin America according to MINTUR reports. If these 3 million tourists did not provide sufficient “interaction” with Cubans to thwart this ridiculous pricing policy, why do you suppose another estimated 1 million more tourists from the US, were the travel restrictions lifted, would have made a difference? On the contrary, these additional visitors would have no doubt provided the regime with at least $1 billion in additional tourism revenues which I believe would have been used to further insulate the leadership from the real world. Besides, for the leadership making policy in Cuba, the US embargo has had little or no direct effect. These Cubans know what the prices of Peugeot automobiles, Gucci handbags, and Rolex watches are throughout the world based on first-hand personal experience. The embargo is not the culprit in this situation.

  • The symbolism with regards to the regime’s insane thinking allowing the people of Cuba to purchase cars at these prices is indicative of how their days are numbered. Like Libya, Iraq and Egypt, the leaders of these countries isolated themselves , from their people, to such a degree that they no longer lived in the real world. Why I’m so much against the embargo and freedom to spend money in Cuba has to do
    with the interaction that is so desperately needed with the Cuban people.
    They are now on the borderline whereby demonstrations and eventual over throw
    of the present group running the show is inevitable. This might not be the tipping point but any further non nonsensical enactments by castro et. al. could be.

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