Ferrari Roars Back Into Venezuela Despite Poverty, Hyperinflation

There are more than 100 Ferraris in Venezuela. Who buys these luxury cars amid the country’s economic crisis? Bloomberg Línea talks to the owner of the brand’s dealerships in the country

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Caracas — On his first visit to Caracas, a car-loving tourist stumbled upon what seemed like a mirage: a Ferrari showroom with huge windows in the Las Mercedes housing development, known as the ‘pink zone’ of the Venezuelan capital.

“Is that what I think it is?” he asked his friend-turned-tour guide, who confirmed what he had only seen on social networks.

The luxury sports car manufacturer’s flag had been raised again in Venezuela, despite this being one of the most critical periods in the South American nation’s economic history.

The young man has worked for the last decade on the restoration of one of these classic cars, which has been in the family for 35 years, and which arrived from Venezuela across the border with Cúcuta, in Colombia.

By that time, in 1988, the Maranello factory had been installed in the Venezuelan capital for more than 30 years, which opened the doors to the American continent, as happened with an exclusive boutique of the Dior house in Caracas in the early 50s.

Marco, the second owner of the Ferrari dealer in the country, received the torch from Carlos Kauffman - one of the first eight authorized dealers in the world - in 1993, prior to a new authorization for car imports into Venezuela.

The Italian, who has lived in Venezuela for more than 40 years, took the decision to open the dealership after, in 2019, Ferrari notified that it would either withdrawing completely from the country, or reopening a dealership that would keep acccompany the luxury car brand’s workshop that continued to operate here.

But he also recognized the risks. In December 2007, he had suffered a suspension of operations as a result of the import blockade in Venezuela, and which, although it allowed him to open up to other markets in Latin America until the scenario improved, was a cause of worry.

“If Venezuela had it all, why couldn’t it have it all again?” he told Bloomberg Línea, recalling the races that were once held in Los Próceres, in the west of the city, and those that are planned to be resumed, together with a driving school, and which he hopes can operate between San Carlos, Turagua and Puerto Ordaz, in the interior of the country.

“This is a passion, and it goes beyond cars,” says Carlos Alberto Silva, sales manager of the Ferrari dealership in Caracas

He has also witnessed that passion among customers who visit the showroom that opened in Las Mercedes in 2021. “They are still the same, and of course there are new ones too, but the factory itself asks us to review their profile,” he says amid the sharp inequality in the country, but which has seen some economic improvements since last year, although benefiting a few.

The Ferrari dealership was not only criticized for its reopening amid an adverse economic context, but also for its alleged links with pro-government sectors and a recent corruption case within state-owned oil company Petróleos de Venezuela (PDVSA).

The dealership dissociates itself from that case, however, and insists on the transparency of its documentation and the public information that is available about it.

Under the ownership of Maranello Motorsports, the dealership pays regular tariffs for the importation of the expensive vehicles, tariffs that be as much as 50% of the cars’ original price, according to the requirements of the country’s customs and tax authority SENIAT.

“Prices vary depending on the local tax component, and sales conditions are governed according to the most commonly used methods in international trade,” explains Claudia Pita, marketing manager of Ferrari Caracas, when asked about the payment methods used in view of the exchange restrictions still in place in Venezuela.

The exclusive, high-end vehicles have garnered the interest of fans and creditors that are certified as authentic, and which prevents, in Ferrari sales manager Silva’s opinion, personalities with money of dubious origin or ill-gotten money from acquiring the cars.

“Why sell to someone who doesn’t fit in with the others? It would be a problem to sell a car to someone with ill-gotten money, a problem for the Ferrari community. It’s a question of experience. Is someone with easy money going to appreciate something so exclusive, and not because it’s expensive, because it’s exclusive. They will prefer to buy something else,” he adds.

Customers can have their cars custom-designed, mostly as collectors’ models, and some of which are transported by transporter to their residences, while others prefer to drive them to the interior of the country, returning them to Caracas for the required maintenance.

There are at least 100 Ferraris in the country, although the annual number of sales is not disclosed by the company based in Maranello.

More than sales growth in Venezuela, the company’s expectations are set on keeping up with production deadlines, with lapses between six and 24 months for the arrival of orders from Italy, which, although is not a significant number, meet the requirements of the factory and its limited production.