Markups dash Cuban hopes as new and used cars go on sale

Markups dash Cuban hopes as new and used cars go on sale

CUBA - 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 per cent 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 labour force work for the state, is $20.

A European diplomat quipped, "I am slightly flabbergasted. With these prices, the old-time US 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 authorisation 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 US cars, there are also many Soviet-made cars, dating from the era when the Soviet Union was the island's biggest ally and benefactor.

Newer models are largely in government hands and were sold used before Friday at a relatively low price to select individuals, for example, Cuban diplomats, doctors and teachers who served abroad.

Across town from the Peugeot dealership, where more than a hundred used rent-a-cars went on sale for prices ranging as a rule from $25,000 on up, disgust turned to anger on Friday.

"These prices show a lack of respect for all Cubans. What is here are wrecks. I now have no hope of getting a car for my family," artist Cesar Perez said, looking at a 2005 Renault on sale for the equivalent of $25,000 and available outside the country on the Internet for $3,000.

A teacher looked at the price list and yelled "Are there any bicycles?" as she stomped away without giving her name.

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