Audio Transcript:

Marco Werman: Minutes ago, the minute you drive that new model off the dealer's lot in Venezuela it appreciates in value. Robert Forester runs a Nissan dealership in Caracas so, how many new models do you have for sale in your dealership?

Robert Forester: None, zero.

Marco Werman: And why not?

Robert Forester: Because I haven't had car since 2008 that was the year when the government changed the import law and they prohibited the entrance to Venezuela of imported cars.

Marco Werman: Right, so if you can find a new car anywhere in Caracas it would appreciate in value. That's just how rare they are right now.

Robert Forester: Yeah, exactly, it has to do with the supply and demand and also due to the fact that the currency, the Bolivar, is devaluating every day and people seek to protect their money and because dollars are scarce they look to invest in other things like cars for example. And because cars are so scarce they appreciate the minute you buy it and you put them on the street they appreciate in almost 25-30 percent.

Marco Werman: So how long are your wait list for new cars?

Robert Forester: I don't have wait lists. Because I haven't had cars for the last five years.

Marco Werman: Wow, do you see this changing any time soon?

Robert Forester: Not with the current government.

Marco Werman: And what would happen if an American hears this and says, ooh, there's a business opportunity, I'll just drive some new cars over land from the U.S. down to Venezuela.

Robert Forester: No, that's going to be very very difficult because you have to go through a lot of bureaucratic paper, papers and you have to go through a lot of permits and probably you won't be able to import the cars here. The only cars that, that are sold in Venezuela are those that belong to the brands that have assembly plants in Venezuela. That would be Mitsubishi, that would be Toyota, that would be Ford, that would be General Motors. But the rest of us that's Nissan, that's Honda, that's
Mercedes Benz, that's Audi, that's BMW, don't have a chance to do business in Venezuela right now. Not with the current conditions.

Marco Werman: And you run a Nissan dealership. How do you stay in business, Robert?

Robert Forester: Just selling spare parts and service.

Marco Werman: Wow, how's that working out?

Robert Forester: Well it's not working very well. I've made break even since 2008 but I'm not making any money. Basically the financial structure of a dealership is made in a sense that what you sell from spare parts and service you pay off the bills and the earnings come out from the sales of new cars. So, in a sense, I'm not making money since 2008. I'm just holding on. It's a decision we've taken due to the fact that this is a family business that has been running for 40 years. So it's not so easy just to shut it down but if things continue the way they are and government decisions do not change then it will inevitable in some time that we have to close.

Marco Werman: So, is the situation so bad that even good condition used cars, or as you guys like to say 'pre-owned', are also appreciating in value?

Robert Forester: Very, very much Marco.

Marco Werman: Wow

Robert Forester: There are even used cars or second hand cars that can cost more than new cars.

Marco Werman: Wow that's a very serious situation it seems.

Robert Forester: Very serious, yes, it's due to the fact where I told you earlier. The Bolivar is devaluating every day so it makes absolutely no sense to have Bolivars in your savings account. The lack of dollars sense almost a year and a half, prevents from people from saving their money and hard currency. So what do they do? They tend to buy things. Houses, cars, electronic equipment. Everything that you can get your hands on that somehow protects the value of your money.

Marco Werman: So cars, houses, they're a hedge against inflation in a country where a gallon of gas costs like 25 cents?

Robert Forester: Well less, less, I mean, I can fill up a 50 liter tank with 5 Bolivar. That would be less, less than 5 dollars and cents.

Marco Werman: Alright, I've had my mind officially blown on this Thursday. Thank you very much Robert Forester for talking with us.

Robert Forester: You're welcome.