Dec. 3 (Bloomberg) -- Venezuela’s President Nicolas Maduro said he’ll sign legislation today to regulate the price of new and used cars in the country’s latest measure to combat record inflation.
The law will allow the government to set car prices, require manufacturers to provide weekly production figures, ensure that used car prices don’t exceed new car costs and provide licenses to individuals to import a vehicle using an account in euros or dollars with a state bank, Maduro said yesterday in a national address.
“The vehicle is produced for who?” Maduro said yesterday in the radio and television address. “For society’s need, not for the mafias that control it. We’re going to regulate from the factory door to the place of sale.”
Venezuela has stepped up efforts to enforce cost-of-living reductions ahead of local elections on Dec. 8. Maduro last month occupied a packaging plant he accused of raising prices, capped costs for commercial real-estate leases and used the military to force price reductions at electronics stores. The national assembly on Nov. 19 granted Maduro the power to enact economic laws, such as limits on profits, without the oversight of congress for one year.
The national assembly first introduced legislation to fix prices for new and used cars, which many Venezuelans use as a hedge against inflation, in January. Automobiles purchased in the country, South America’s largest oil exporter, typically gain in value the moment they are driven off the dealership lot.
Car sales in October fell 26.5 percent from a year earlier to 8,057 units, Venezuela’s Automotive Chamber of Commerce said in a statement on Nov. 7.
The country is reviewing e-commerce websites including MercadoLibre.com as part of its efforts to combat price speculation, Maduro said Nov. 6, also naming TuCarro.com and TuInmueble.com, which sell cars and real estate, respectively.
The bolivar has fallen 72 percent this year in black market trading to about 62 per dollar, according to dolartoday.com, a website that tracks the rate. Venezuelans use the black market when they can’t get access to the central bank’s so-called Cadivi system that sells dollars at the official rate of 6.3 bolivars for priority imports.
Penalties against people involved in “price speculation” should be toughened and arrests should be made, Maduro said on Nov. 29.
“We have to be firm with those who are raising prices after inspections,” Maduro said that day, adding that 68 percent of Venezuelans supported state-enforced price cuts over the past month according to poll data he had seen.
Former President Hugo Chavez, who died of cancer in March, nationalized more than 1,000 companies or their assets during his 14 years in power.
Maduro is passing populist measures to regain support that has been eroded by the fastest inflation in the world ahead of this week’s municipal elections, said David Smilde, a sociology professor at the University of Georgia. Annual inflation accelerated to 54 percent in October, the highest rate in 16 years.
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