Cuban hopes dashed as new and used cars go on sale

Fri Jan 3, 2014 6:55pm EST
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By Marc Frank

HAVANA (Reuters) - Cubans awoke on Friday for the first time in half a century with the right to buy new and used vehicles from the state without special permission, but markups of 400 percent or more quickly dashed most people's expectations.

At the state-run Peugeot dealership in Havana on Friday morning, where prices ranged from $91,000 for a 2013 model 206 to $262,000 for a 508, people walked away shaking their heads in disgust.

"I earn 600 Cuban pesos per month (approximately $30). That means in my whole life I can't buy one of these. I am going to die before I can buy a new car," Roberto Gonzales, a state driver, said, walking back to his 1950s Plymouth.

The average monthly wage in Cuba, where four out of five of the 5 million-strong labor force work for the state, is $20.

A European diplomat quipped, "I am slightly flabbergasted. With these prices, the old-time U.S. cars will not disappear fast from the streets."

Under a reform two years ago, Cubans can now buy and sell used cars from each other, but until Friday had to request authorization from the government to purchase a new vehicle or second-hand one, usually a rental car, from state retailers.

Before September 2011, only automobiles that were in Cuba before the 1959 revolution could be freely bought and sold, which is why there are so many 1950s or older cars, most of them American-made, rumbling through Cuban streets.

Along with Cuba's famous rolling museum of vintage U.S. cars, there are also many Soviet-made cars, dating from the era when the Soviet Union was the island's biggest ally and benefactor.   Continued...

A man looks at the price of Peugeot cars in Havana January 3, 2014. REUTERS/Enrique de la Osa