Total Market Size
Total Local Production
Imports from the U.S.
Sources: (related to this chart).
(The above statistics are unofficial estimates in millions of USD and are focused on parts and accessories listed below)
2012 data is estimated to Dec 31, 2012.
2012 market data is projected with an increment of 6% per year from 2011
National Statistics Department-Dane: www.dane.gov.co
World Trade Atlas.
Colombia is a major player in the regional automotive market but has experienced a 2.6% decrease in sales this past year. There were 315,968 vehicles sold, as opposed to the 324,570 vehicles sold in 2011. According to Portafolio1, there were several reasons related to this reduction: a) the global economic situation; b) lack and inefficient infrastructure in the main cities, and the VAT expected to be paid for the new vehicles when the new tax reform takes place in 2013. But despite these numbers, 2012 was the second best year in Colombia’s history in auto sales, after 2011’s record numbers.
The 5.5 million2 automotive units currently in the country, ranks Colombia as the third in Latin America. But what is more important to note is that Colombia has access to a market of 34 million vehicles. This is due to the fact that the country has signed several free trade agreements. With this, they are taking advantage of the ideal location to create a platform for the manufacturing and assembly of cars, buses and auto parts intended to supply the local and regional markets. This makes Colombia and the region an excellent market for spare parts for older cars.
Another key driving factor in Colombia for the high demand of spare parts is the frequent need to replace broken parts. Although the road infrastructure in Colombia is improving, nationwide they are in poor to fair condition, increasing the likelihood of damage to vehicles and requiring constant vehicle safety checks and replacement parts.
Colombia currently ranks 3rd in automobile manufacturing in Latin America. The automotive sector contributes to 6.2% of the country’s GDP3 and employs about 2.5% of the country’s population. With an estimated population of 45 million, Colombia has on average one vehicle per every 15 inhabitants.
The automotive market in Colombia is comprised of 40% locally produced vehicles and 60% imported vehicles from South Korea, México, India, Japan, Ecuador, China, and United States. The high import percentage represents good opportunities for worldwide imported parts and accessories, but especially for the U.S. products, as they are very well known and accepted nationwide. In regards to the supply chain, more than 106 countries compete in Colombia automotive parts market. The U.S., Brazil, Japan and China have the highest market shares. The U.S. and Brazil compete with quality state-of-the-art products, which are at a higher cost point, while the Asian countries have obtained larger market share pursuing a low price strategy.
There are a wide offering of brands traditionally found in the local market and the number of motor vehicles imported during the period of 1997-2012. Approximately 53 brands and some 267 models are found in the market. The following are highly competitive motor vehicle brands within the Colombian import market: Chevrolet, Renault, Mazda, Hyundai, Ford, Nissan, Skoda, Mitsubishi, Volkswagen, Kia, Toyota, Peugeot, Daihatsu, Honda, Citroen, Dacia, International, BMW, Mercedes-Benz, Dina, Renault, Kenworth, Mack, Dodge, Freightliner, Audi, Daihatsu, Samsung, Subaru, Nissan, Isuzu, Hino, Suzuki and Volvo.
There are 3 major organizations that produce most of the vehicles in Colombia: General Motors, Renault, and Mazda. In 2012, the percentage of nationally produced vehicles was 40% (126,387 units of the 315,968 units sold in 2012). General Motors sold the greatest amount of units in 2012 totaling 50,793. Vehicles from General Motors have a large percent of imported parts from the U.S., which also represents a good opportunity for American companies that sell spare parts for this type of vehicles.
Best prospects for Automotive Parts and Accessories are:
Free Trade Agreement (FTA):
Given the tremendous opportunities for U.S. exporters in Colombia, it is appropriate that on October 21, 2011, President Obama signed the United States-Colombia bilateral trade agreement (U.S.-CTPA) following its approval by the U.S. Congress. On May 15, 2012 the FTA entered into effect finishing the implementation phase. A significant amount of auto parts, which were previously on average at 13%, now have zero tariffs to enter into the Colombian market. Some other parts fall under staging baskets from 5 years to 10 years tariff reduction. Please consult your harmonized tariff code to see which basket your products fall under.
With the FTA implementation, Colombia is accepting re-manufactured auto parts listed under Chapter Four, Rules of Origin and Origin Procedures, Section A - Rules of Origin, ANNEX 4.18. With this, it is important to note precisely what are classified as Remanufactured goods. The definition of this term under the agreement is: industrial goods assembled in the territory of a Party, listed in Annex 4.18, that: (1) are entirely or partially comprised of recovered goods; and (2) have the same life expectancy and meet the same performance standards as new goods; and (3)enjoy the same factory warranty as such new goods. What is important to note is that this is not a blanket acceptance. A key example of products not permitted under this classification is brake parts and filters. For additional information please refer to certificate of origin under Colombia- U.S. Free Trade Agreement.
Goods classified in the following Harmonized System subheadings may be considered remanufactured goods, except for those designed principally for use in automotive goods of Harmonized System headings or subheadings 8702, 8703, 8704.21,8704.31, 8704.32, 8706, and 8707:8408.10, 8408.20,8408.90, 8409.91,8409.99,8412.21, 8412.29,8412.39,8412.90,8413.30, 8413.50,8413.60, 8413.91, 8414.30, 8414.80, 8414.90, 8419.89, 8431.20, 8431.49, 8481.20, 8481.40, 8481.80, 8481.90, 8483.10, 8483.30, 8483.40, 8483.50, 8483.60, 8483.90,8503.00, 8511.40, 8511.50, 8526.10,8537.10, 8542.21, 8708.31, 8708.39, 8708.40, 8708.60, 8708.70, 8708.93,8708.99,9031.49.
Other provisions which are of interest to U.S. companies under the FTA include strong protection for U.S. investors (legal stability), expanded access to service markets, greater intellectual property rights protection, market access for remanufactured goods, increased transparency and improved dispute settlement mechanisms (arbitration). Under the National Treatment Caveat, Chapter 9 United States-Colombia bilateral trade agreement (U.S.-CTPA), U.S. companies must be treated as locals when they participate on public bids eliminating the disadvantage they used to have prior to the signing of the agreement.
The Colombian end-users of automotive parts and accessories are numerous. Eighty-three percent of total Colombian vehicles are for private use; fourteen percent are in public service and three percent are for official use (not including those owned by the Ministry of Transportation, the Ministry of Defense, and the Ministry of Foreign Relations).
Breakdown of End Users:
a. Dealers and Distributors of Imported Vehicles
b. Freight and Passenger Transportation Companies
c. Importers and Distributors of Automotive Parts and Accessories
d. Repair and Maintenance Shops
e. Service Stations, Gasoline Dealers and Lubrication Centers
f. Tire Distributors
g. Government Agencies
h. Other End-Users: rental car and limousine companies.
U.S. Commercial Service Bogotá contact:
Ricardo Roldan, Financial and Commercial Assistant
Tel: (571) 275-2731
Asopartes (Association of Automotive Parts Importers and Dealers): www.asopartes.com.co
DIAN (Colombian Customs): www.dian.gov.co
Colombian Government: www.gobiernoenlinea.gov.co
DANE (Statistics Bureau): www.dane.gov.co
Ministry of Transportation: www.mintransporte.gov.co
ANDI (National Industrialists Association): www.andi.com.co
ACOLFA (Association of Automotive Parts Manufacturers): www.acolfa.com.co
FENALCO (National Merchants Federation): www.fenalco.com.co
PROEXPORT COLOMBIA (Export Promotion): www.proexport.com
Parts and Accessories Related to this Report. (HTS Codes)
Other cast-iron engine parts
Tapered roller bearings
Rims and its parts
Suspension shock absorbers
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1 Portafolio, Colombian Economic Newspaper
2 According to Ministry of Foreign Trade
3 Information from Proexport
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