Toyota’s demand planning in Venezuela

In yet another revolutionary twist Hugo Chavez ordered Toyota to produce more of Land Cruiser 70, the model that was discontinued in 2007, or face being expelled from the country with company plants expropriated. The company was also ordered to share the technology with Venezuelans. The story sounds only too familiar.

 

In the last couple of years Venezuela pushed out British Petroleum, Exxon Mobil and Phillips Conoco from its oil fields effectively expropriating their assets in the country. Venezuela’s energy sector, along with other infrastructure industries such as communications, fell victim to the government’s plan to nationalize the most lucrative industries. Car manufacturing has been spared until now.

 

Reuters reported Hugo Chavez saying "we must force them" in relation to the fact that Toyota stopped manufacturing the vehicle in question. The controversy was created by inability of the government to provide enough 4x4 all terrain vehicles to the laborers in rural areas as this is the only way of transportation available in the countryside. Instead of focusing on the lack of roads in these areas Mr. Chavez decided to focus on Toyota.

 

CNN money reports that Mr. Chavez ordered the trade ministry to undertake a "severe inspection" of Toyota - "You tell the people at Toyota that they have to produce this model and we are going to impose a quota, and if they don’t meet it, we will punish them." This comes on top of deepening ties between Venezuela and likeminded governments of China, Russia and Belorus who stand to gain from Toyota’s precarious position if Chavez makes good on his promise.

 

Comments: 0; Published: January 25, 2010; Permalink

Tags: manufacturing,trade,transportation