CubaTrade-May2017-Flipbook

Top left: Coco taxis take passengers along the Malecon seawall, Havana
Top right: Friends ride past Havana's Gran Teatro on a motorcyle
Middle: Visitors enjoy a taxi ride and a little American nostalgia
Bottom right: In rural Cuba, horse drawn carts sometimes outnumber cars
Bottom left: Tourists arrive at their destination by private luxury bus
201 categories of self-employment occupations, including 15
related to transporting people.
In 2010, the Cuban government issued 43,702 cuentapropista
licenses for carrying passengers; by 2015, that number had
jumped to 72,077. In 2015 alone, 13,086 licenses were issued
to cars, followed by trucks (2,987); jeeps (1,042); SUVs (972);
microbuses (650); and minivans (87).
Perhaps reflecting the high cost of gasoline as well as exhorbitant
car prices in Cuba, by 2015 there were more licenses issued
for horse-drawn carriages transport people (13,336) than for cars
(13,086), followed by those for Havana’s ubiquitous Bici-Taxi
bicycles (12,125).
Autos used as taxis controlled by the state, 1985-2014
Source: Overall statistics (1985-2009) and provincial statistics (2010-2014) issued by the National Office
of Statistics and Information (ONEI).
Source: Source: Overall Overall statistics statistics (1985-2009) (1985-2009) and provincial and statistics provincial (2010-2014) statistics issued (2010-2014) by the National Office
issued by the National of Office Statistics of Statistics and Information and Information (ONEI). (ONEI)
Licenses issued for private sector self-employed
transportation, 2010-2015
Licenses issued for private sector self-employed transportation, 2010-2015
Transportation mode 2010 2015
Growth rate
(%)
Trucks 1,949 2,987 53.26
Registered vehicles, 2000-2014
CUBA'S POTENTIAL AUTO MARKET
These figures illustrate Cuba’s desperate need for transportation,
yet Cuban citizens have limited options when it comes to buying
a car. Ad hoc solutions ranging from shared rides to horse-drawn
carts are clearly not enough to meet demand.
This should present huge opportunities in the retail auto
market and in car rentals to tourists. Indeed, conditions are ripe
for a widescale opening of the vehicle market—even to the point
of building auto assembly plants on the island. However, profound
policy changes must first take place in Cuba’s commercial
structure.
This process has already begun. In 2011, the Cuban government
took the first step of authorizing the sale and purchase of
cars between Cubans and foreign residents. Subsequently, Decree
320, approved in December 2013, completely liberalized the sale
and purchases of cars. This law established that Cuban citizens
“could purchase through state commercial entities internal
combustion cycles, motorbikes, cars, rural cars, vans, SUVs and
mini-buses.” For the first time in 51 years, Cubans could buy a
new or used motor vehicle without restrictions. However, a major
obstacle emerged: very high prices.
Cuba’s strategy has been to maintain strict control over
public transport, using retail auto sales and the tourism transport
sector to finance public transport. The problem is that extremely
high prices for cars keeps the number of transactions way down.
In June 2014, six months after Cuba lifted restrictions on car
sales, state-run CIMEX had sold only 50 autos and four motorbikes.
With average sticker prices of 23,759 CUC (about $28,000)
in a country where buying power is low and purchases must be
made in cash, it’s no wonder sales are depressed. Studies indicate
that had a policy of more accessible prices been applied, more than
250,000 cars could have been sold on the island up to today.
CONCLUSIONS
Vehicle types 2000 2014 14/10
Automobiles 216,461
Motorcycles 232,888
Growth
rate(%)
231,25
4 14,793 6.83
211,39
5 -21,493 -9.23
Trucks Licenses issued for 140,955 private sector 66,492 self-employed -74,463transportation, -52.83 2010-2015
Jeeps 40,613 28,897 -11,716 -28.85
Growth rate
Vans Transportation mode 21,822 20,920 2010 -902 2015 -4.13(%)
Buses Trucks 30,326 18,356 -11,970 1,949 2,987 -39.47 53.26
Panel trucks 15,455 17,061 1,606 10.39
Trailers 27,996 15,505 -12,491 -44.62
Sports cars 13,529 7,598 -5,931 -43.84
Microbuses 19,617 5,746 -13,871 -70.71
759,66 623,22 -136,43
Source: Total Overall statistics (1985-2009) 2 and 4 provincial 8 statistics -17.96 (2010-2014)
issued by the National Office of Statistics and Information (ONEI)
With the rapid growth in tourism and more demand from
Cuban citizens, it’s no surprise that the private sector now dominates
the taxi business, with 17,790 taxis plying the Cuban streets
as of 2015—eight times larger than the state fleet.
Source: Based on statistics from the National Registry of Vehicles of the Ministry of Transportation
(MITRANS)
Figure 3. Land transport in Cuba, millions of passengers, 1963-2015
Cuba’s transport sector is facing stronger demand than ever
before. With passenger transport at the same level it was 43 years
ago and few private vehicles—90 percent of them in use for more
than 30 years—Cuba needs more than 8,300 businesses just to
return to mid-1980s levels.
In the coming years, Cuba will receive the largest avalanche
of tourists—both domestic and foreign—in its history. The
purchasing power of Cubans has increased considerably thanks to
remittances and growing private sector.
To satisfy demand, the government must change its 2013
pricing policy for the sale of cars to private individuals and replace
it with more accessible prices for Cuban citizens. It should
also introduce a system of credit to allow at least partial financing
for car purchases.
Building a domestic market for car sales would generate
thousands of new jobs, create hundreds of workshops for maintenance
and repair and lead to multimillion-dollar sales of fuels,
spare parts and accessories. More importantly, this would relieve
the passenger transportation crunch, leading to a more dynamic,
efficient economy. And finally, strong domestic demand could attract
foreign investors hoping to establish factories for cars suited
to the reality of the Cuban market. H
MAY 2017
CUBATRADE
81