President Hugo Chavez of Venezuela plans to oust car maker Toyota Motor Corporation if it doesn’t make an all-terrain version of its 4X4 vehicles available to use in rural areas. In a recent speech, Chavez heatedly announced that failure to share this technology with locals to benefit poorer areas would result in Toyota’s expulsion from the country.
Chavez said, “What’s this that Toyota doesn’t want to make the ‘rustic’ model here? We must force them. And if they don’t, then they should leave and we’ll bring another company in … The Chinese want to come and they make ‘rustic’ models.” The speech took place in Caracas during a ceremony to hand keys to vehicles imported from Argentina to locals; the vehicles are gifts from the Venezuelan government to the new owners.
As a part of his 21st century revolution, Chavez has nationalizing many industries in Venezuela including oil and power but has not touched the car industry.
The 4X4 vehicles are especially useful for Venezuela’s poorer population. In Caracas, many people live on the hillsides in slums and areas that have no decent roads. The all-terrain vehicles are the only means of reliable transportation there, and there has been a shortage of them.
Toyota will undergo a severe inspection ordered by Chavez, and he also warned that this would be the fate of other companies in the country if they fail to share technology with locals.
Chavez said, “You tell the people at Toyota that they have to produce this model and we are going to impose a quota, and if they don’t meet it, we will punish them.” The penalty for noncompliance will be expropriation of Toyota’s facilities as well as monetary fines.
Despite the fiery speech, Toyota has not been contacted directly by Chavez regarding the issue. However a source at Toyota’s Venezuelan plant says that they had stopped producing the Land Cruiser 70 in 2007 with full knowledge of the Venezuelan government.
Plans were to import the vehicles, but Toyota has yet to receive the necessary license to do so. A source familiar with the issue said, The government was informed; it can’t be a surprise.
Mitsubishi, Hyundai and General Motors Co. also have assembly plants in Venezuela, which is South America’s top oil-exporter.
Chavez contends that Russia, Belorussia, Iran and China are ready to take Toyota’s place if it is unwilling to comply with his demands. “If they don’t want to, they should go away. I invite them to pick up their things and go,” he said.