Colombia - Automotive PartsColombia - Automotive Parts
Overview
Table 1: Colombia Automotive Production Data, 2015-2018 ([1]
Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
Colombia is one of the largest automotive markets in South America, after Brazil and Argentina. The sector grew 7.7 percent from 2017 to 2018, driven by a better political climate, highway infrastructure projects, and an increase in Colombia’s economic output (GDP), which grew an estimated 2.7 percent in 2018. The sector appears to be steadily rebounding after a tax reform package passed in 2016 raised the Value Added Tax from 16 percent to 19 percent, which put a damper on consumer spending. Another important factor to consider is the growth of the used car market: for every new vehicle sold, four used vehicles are sold in Colombia.
Auto parts sales totaled USD 4.21 billion in 2018, a 9.5 percent annual increase over 2017. According to the leading automotive parts association in Colombia, Asopartes, the increase can be explained by less uncertainty in the economy with the conclusion of the 2018 Presidential election, and better performance of the economy due to lower inflation rates, stronger consumer confidence, and lower interest rates. Additionally, an increase in sales of electric and hybrid vehicles led to more demand for vehicle and automotive parts[6].
At the end of 2017 there were nearly 14 million vehicles in Colombia, according to data from the Ministry of Transportation and the automotive association Andemos. Of those, 1.8 million were registered for transportation (freight and passenger) and 7.1 million were motorcycles (57 percent). Not including motorcycles, 92 percent of Colombian vehicles are for private use, seven percent are in public service, and one percent is for official use[7]. It is estimated that eight million Colombians use motorcycles, or one in every seven citizens. There were 497,414 motorcycles registered in Colombia in 2018. According to research conducted by Business Monitor International in 2017, Colombia’s car ownership is still far from reaching saturation point.
A report conducted by the multinational banking group BBVA in 2018 estimates that the automotive sector contributes 1.5 percent to the country’s GDP and is the 8th largest industrial employer. Colombia currently ranks as the third largest automobile manufacturer in South America. In addition, after Brazil, Colombia is the second largest motorcycle producer in the region, with an annual output of 547,296 units (domestic production satisfied 93 percent of local consumption in 2018)[8].
Several international auto manufacturers currently produce vehicles in Colombia. General Motors (Chevrolet and Isuzu), based in Bogotá, has an annual capacity of about 100,000 units, and in 2013 opened a stamping plant to manufacture and export body panels to markets in Central America and South America. Renault, based in Medellin, has an annual capacity of 80,000 units. Automaker Daimler's subsidiary Daimler Colombia operates an assembly facility in Bogotá and opened a new bus manufacturing unit in Funza (near Bogotá) in June 2015 to add to its existing small-scale production facility in Bogotá. The new facility has an annual capacity of 4,000 units.
Mazda Motor had a capacity of 15,000 units annually until its assembly plant closed in May 2014. The company’s plant in Colombia was only using 30 percent of installed capacity and suffered from relatively high production costs and low sales volumes in Colombia and regional export markets Ecuador and Venezuela. Mazda still sells imported vehicles in Colombia and provides after-sales service through its Mazda de Colombia subsidiary. Mazda sales increased 15.5 percent in 2018 and the company ranked fourth in top-selling brands in the country (21,520 units sold).
More than 100 brands and 700 models of vehicles are found in the Colombian market. The biggest seller is Chevrolet (19.5 percent market share), followed by Renault (19.4 percent market share), with Nissan in third place (nine percent market share). Kia has dropped to fifth place after Mazda (8.4 percent market share).[9] It is important to note that most of the GM passenger vehicles assembled in Colombia are based on Asian platforms, especially South Korea (Daewoo) and China (Shanghai General Motors).
In 2016, Colombia’s percentage of nationally-produced vehicles was 41 percent. The other 59 percent of vehicles were imported from Mexico, Japan, the United States, Brazil and South Korea. Local production of vehicles in Colombia has been decreasing in the past few years. However, the high percentage of imports represents a good opportunity for imported parts and accessories, especially those from the United States, which are very well known and regarded nationwide.
Vehicle manufactures in Colombia are concerned with some Free Trade Agreements (FTAs) Colombia has signed with countries that have a large auto industry, as these countries can flood the market with cheap vehicles. Colombia has trade agreements with more than 25 countries and recently signed agreements with Israel and Panama. Further agreements are currently being discussed with Japan and Turkey, and this would likely boost the volume of imported vehicles into Colombia.
Firms from more than 100 countries compete to supply the Colombian automotive parts market, with China, the United States, Japan and Brazil having the highest market share. Firms from the United States and Brazil compete with quality and state-of-the-art products, while firms from many Asian countries have obtained larger market share pursuing a low-price strategy and offering lower quality.
In 2016, the annual production of automotive parts in Colombia was equivalent to USD 218 million, with exports accounting for USD 366 million. The main destinations for Colombia’s exports of auto parts are the United States, Ecuador, Peru, Mexico, and Brazil[10]. In 2018, imports represented USD 3.77 billion and were dominated by China (25 percent), the United States (18 percent), Brazil (eight percent), Japan (7.4 percent), and Mexico (4.2 percent).[11]
The Colombian automotive parts industry faces several challenges, such as stolen vehicles, counterfeit products, and smuggling. During 2018, a total of 40,966 vehicles (including motorcycles) were stolen in the country, representing an increase of 31 percent in comparison with 2017. This has created an illegal market for used auto parts valued at approximately USD 685 million in 2018[12]. The Government of Colombia is promoting awareness campaigns through national television and radio to prevent the purchase of stolen auto parts and is also enforcing penalties for consumers who buy illegal (stolen and counterfeit) auto parts.
Leading Sub-Sectors
Best prospects for automotive parts and accessories are:
Opportunities
In terms of auto parts, the United States is Colombia’s second largest trading partner after China and Colombia is the United States’ fourth largest trading partner in Latin America.
Colombia provides the following opportunities to U.S. automotive exporters:
Trade Events
Expopartes
Held every two years; next event will be Summer 2021 in Bogotá
Web Resources
Ricardo Roldan
U.S. Commercial Service Bogotá
Phone: 571-275-2731
Email: ricardo.roldan@trade.gov
Key Contacts
Association of Automotive Parts Importers and Dealers (ASOPARTES)
Colombian Association of Automotive Parts Manufacturers (ACOLFA)
Colombian Association of Motor Vehicles (ANDEMOS)
Colombian National Tax and Customs Directorate (DIAN)
Colombian Merchants Federation (Fenalco)
Colombian Statistics Bureau (DANE)
Ministry of Transportation
National Industrialists Association (ANDI)
National Transit Registration System (RUNT)
ProColombia (Export Promotion, Tourism and Investment Agency)
(1) Informe Sector Automotor up to December 2018, Fenalco – ANDI
(2) Informe Venta Autopartes, 2018, Asopartes
(3) Vehicle bodies and chassis are not included in auto parts sales
(4) Manual Estadístico 37 "El Sector Automotor Colombiano 2017”- Acolfa
(5) Colombian Vehicle Magazine “Motor”, Edition 715, 2019
(6) Informe Venta Autopartes, 2018, Asopartes
(7) Parque Automotor Colombia, 2018, Andemos
(8) Manual Estadístico 37 "El Sector Automotor Colombiano 2017”, Acolfa
(9) Informe Sector Automotor up to December 2018, Fenalco – ANDI
(10) Statistics Bureau - DANE; Global Trade Atlas - Colombian Exports Autoparts
(11) Global Trade Atlas, Colombian Imports Autoparts
(12) Informe Hurto de Vehículos, December 2018 – ASOPARTES
(13) Colombia Autos Report 2017, Business Monitor International; El Tiempo Article, March, 2019
(14) BBVA Research "Automobile Market Outlook, Colombia 2018” Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
Table 1: Colombia Automotive Production Data, 2015-2018 ([1]
| Auto Sector (in units) | 2015 | 2016 | 2017 | 2018 |
|---|---|---|---|---|
| Sales | 281,885 | 253,651 | 238,237 | 256,662 |
| Local Production | 128,444 | 124,795 | 116,341 | 121,869 |
| Imports | 178,346 | 158,532 | 176,400 | 134,793 |
| Exports | 29,584 | 38,731 | 45,000 | 45,519 |
| Total Market Size | 277,206 | 244,596 | 253,398 | 211,143 |
| Auto Parts (USD millions) | 2016 | 2017 | 2018 |
|---|---|---|---|
| Sales [3] | 3,895 | 3,849 | 4,215 |
| Auto Parts (USD millions) | 2015 | 2016 | 2017 | 2018 |
|---|---|---|---|---|
| Local Production | 321 | 218 | - | - |
| Imports | 3,567 | 3,241 | 3,497 | 3,775 |
| Imports from the United States | 772 | 525 | 632 | 683 |
| Exports | 425 | 366 | 390 | 450 |
| Total Market Size | 3,463 | 3,093 | - | - |
| Exchange Rates: 1 USD | COP 2,746 | COP 2,951 | COP 2,951 | COP 2,956 |
| Category | 2017 Sales (units) | 2018 Sales (units) | 2017 Market Share % | 2018 Market Share % | Variation in Sales Volume % |
|---|---|---|---|---|---|
| Private cars | 126,836 | 131,406 | 53.2 | 51.2 | 3.6 |
| SUVs | 70,479 | 83,129 | 29.6 | 32.4 | 18 |
| Trucks and buses | 13,793 | 16,001 | 5.8 | 6.2 | 16 |
| Pick ups | 13,872 | 15,457 | 5.8 | 6.0 | 11 |
| Taxis | 8,533 | 8,865 | 3.6 | 3.5 | 3.9 |
| Vans | 4,724 | 1,804 | 2.0 | .7 | -61.8 |
| Total | 238,237 | 256,662 | 100 | 100 |
Auto parts sales totaled USD 4.21 billion in 2018, a 9.5 percent annual increase over 2017. According to the leading automotive parts association in Colombia, Asopartes, the increase can be explained by less uncertainty in the economy with the conclusion of the 2018 Presidential election, and better performance of the economy due to lower inflation rates, stronger consumer confidence, and lower interest rates. Additionally, an increase in sales of electric and hybrid vehicles led to more demand for vehicle and automotive parts[6].
At the end of 2017 there were nearly 14 million vehicles in Colombia, according to data from the Ministry of Transportation and the automotive association Andemos. Of those, 1.8 million were registered for transportation (freight and passenger) and 7.1 million were motorcycles (57 percent). Not including motorcycles, 92 percent of Colombian vehicles are for private use, seven percent are in public service, and one percent is for official use[7]. It is estimated that eight million Colombians use motorcycles, or one in every seven citizens. There were 497,414 motorcycles registered in Colombia in 2018. According to research conducted by Business Monitor International in 2017, Colombia’s car ownership is still far from reaching saturation point.
A report conducted by the multinational banking group BBVA in 2018 estimates that the automotive sector contributes 1.5 percent to the country’s GDP and is the 8th largest industrial employer. Colombia currently ranks as the third largest automobile manufacturer in South America. In addition, after Brazil, Colombia is the second largest motorcycle producer in the region, with an annual output of 547,296 units (domestic production satisfied 93 percent of local consumption in 2018)[8].
Several international auto manufacturers currently produce vehicles in Colombia. General Motors (Chevrolet and Isuzu), based in Bogotá, has an annual capacity of about 100,000 units, and in 2013 opened a stamping plant to manufacture and export body panels to markets in Central America and South America. Renault, based in Medellin, has an annual capacity of 80,000 units. Automaker Daimler's subsidiary Daimler Colombia operates an assembly facility in Bogotá and opened a new bus manufacturing unit in Funza (near Bogotá) in June 2015 to add to its existing small-scale production facility in Bogotá. The new facility has an annual capacity of 4,000 units.
Mazda Motor had a capacity of 15,000 units annually until its assembly plant closed in May 2014. The company’s plant in Colombia was only using 30 percent of installed capacity and suffered from relatively high production costs and low sales volumes in Colombia and regional export markets Ecuador and Venezuela. Mazda still sells imported vehicles in Colombia and provides after-sales service through its Mazda de Colombia subsidiary. Mazda sales increased 15.5 percent in 2018 and the company ranked fourth in top-selling brands in the country (21,520 units sold).
More than 100 brands and 700 models of vehicles are found in the Colombian market. The biggest seller is Chevrolet (19.5 percent market share), followed by Renault (19.4 percent market share), with Nissan in third place (nine percent market share). Kia has dropped to fifth place after Mazda (8.4 percent market share).[9] It is important to note that most of the GM passenger vehicles assembled in Colombia are based on Asian platforms, especially South Korea (Daewoo) and China (Shanghai General Motors).
In 2016, Colombia’s percentage of nationally-produced vehicles was 41 percent. The other 59 percent of vehicles were imported from Mexico, Japan, the United States, Brazil and South Korea. Local production of vehicles in Colombia has been decreasing in the past few years. However, the high percentage of imports represents a good opportunity for imported parts and accessories, especially those from the United States, which are very well known and regarded nationwide.
Vehicle manufactures in Colombia are concerned with some Free Trade Agreements (FTAs) Colombia has signed with countries that have a large auto industry, as these countries can flood the market with cheap vehicles. Colombia has trade agreements with more than 25 countries and recently signed agreements with Israel and Panama. Further agreements are currently being discussed with Japan and Turkey, and this would likely boost the volume of imported vehicles into Colombia.
Firms from more than 100 countries compete to supply the Colombian automotive parts market, with China, the United States, Japan and Brazil having the highest market share. Firms from the United States and Brazil compete with quality and state-of-the-art products, while firms from many Asian countries have obtained larger market share pursuing a low-price strategy and offering lower quality.
In 2016, the annual production of automotive parts in Colombia was equivalent to USD 218 million, with exports accounting for USD 366 million. The main destinations for Colombia’s exports of auto parts are the United States, Ecuador, Peru, Mexico, and Brazil[10]. In 2018, imports represented USD 3.77 billion and were dominated by China (25 percent), the United States (18 percent), Brazil (eight percent), Japan (7.4 percent), and Mexico (4.2 percent).[11]
The Colombian automotive parts industry faces several challenges, such as stolen vehicles, counterfeit products, and smuggling. During 2018, a total of 40,966 vehicles (including motorcycles) were stolen in the country, representing an increase of 31 percent in comparison with 2017. This has created an illegal market for used auto parts valued at approximately USD 685 million in 2018[12]. The Government of Colombia is promoting awareness campaigns through national television and radio to prevent the purchase of stolen auto parts and is also enforcing penalties for consumers who buy illegal (stolen and counterfeit) auto parts.
Leading Sub-Sectors
Best prospects for automotive parts and accessories are:
- Brake fluid
- Transmission shafts, bearings, gears
- Tires for small vehicles, trucks and buses
- Tire retreading equipment
- Tire recycling operators
- Engines and engine parts
- Filters
- Insulated wire, cable
- Electrical parts
- Tire retreading equipment
- Tire recycling operators
Opportunities
In terms of auto parts, the United States is Colombia’s second largest trading partner after China and Colombia is the United States’ fourth largest trading partner in Latin America.
Colombia provides the following opportunities to U.S. automotive exporters:
- Vehicles
- Electric vehicles could be a growth area, especially in public transportation. Such vehicles would have to have the requisite power to climb steep hills at high elevation while full of passengers. The local public transportation companies located in Medellin, Cali and Bogota are in the process of renovating their fleets, and they are considering including electric busses. The cities need to comply with regulations to reduce air pollution.
- The Colombian Central Bank continued to cut short term interest rates in 2018, a measure that may encourage commercial banks to lower auto loan rates[13]. There are also signs that consumer confidence is rebounding after the national Value Added Tax was increased from 16 percent to 19 percent in January 2017.
- Auto parts
- A. The high number of vehicles imported into Colombia represents a good opportunity for imported parts and spare and replacement parts and accessories, especially for U.S. products that are well known and regarded. Additionally, under the United States-Colombia Trade Promotion Agreement (TPA), some parts and auto parts (which were previously assessed an average tariff of 13 percent) currently enter the Colombian market tariff free, while tariffs on other parts will be reduced to zero over the next two to five years.
- With the implementation of the TPA, 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. Goods classified in the following Harmonized System subheadings may be considered remanufactured goods that would be allowed to be imported into Colombia: 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.
- The country is currently formulating policies to allow importation of remanufactured products to meet commitments under the TPA with the United States.
- Other provisions of the TPA 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 within the TPA, U.S. companies must be treated as locals when they participate in public bids, eliminating the disadvantage they used to face prior to the signing of the agreement.
- B. The Government of Colombia announced that as of August 6, 2014 (Decree 2910, 2013), it would eliminate tariffs on imports of raw materials and inputs for the automotive sector (manufacture of auto parts and vehicle assembly in Colombia), under the condition that they are not produced in Colombia. This decision was part of the Program for the Promotion of the Automotive Industry (PROFIA, by its Spanish acronym), which considers this sector key to the country’s industrial development. The argument in favor of this incentive centered on the technology transfer effect of the automotive industry in terms of human capital formation and entrepreneurial learning, which are often transferred to other manufacturing sectors of an economy[14].
- C. Automotive parts for electric vehicles is also becoming a trend. For example: engines for heavy duty trucks.
- Freight and passenger transportation companies
- Government agencies
- Other end users: rental car and limousine companies
- Repair and maintenance shops
- Service stations, gasoline dealers and lubrication centers
- Dealers and distributors of imported vehicles
- eCommerce sites that sell auto parts to end users (a relatively new channel of distribution in Colombia)
- Importers and distributors of automotive parts and accessories
- Sales representatives of automotive parts
- Tire distributors
Trade Events
Expopartes
Held every two years; next event will be Summer 2021 in Bogotá
Web Resources
Ricardo Roldan
U.S. Commercial Service Bogotá
Phone: 571-275-2731
Email: ricardo.roldan@trade.gov
Key Contacts
Association of Automotive Parts Importers and Dealers (ASOPARTES)
Colombian Association of Automotive Parts Manufacturers (ACOLFA)
Colombian Association of Motor Vehicles (ANDEMOS)
Colombian National Tax and Customs Directorate (DIAN)
Colombian Merchants Federation (Fenalco)
Colombian Statistics Bureau (DANE)
Ministry of Transportation
National Industrialists Association (ANDI)
National Transit Registration System (RUNT)
ProColombia (Export Promotion, Tourism and Investment Agency)
(1) Informe Sector Automotor up to December 2018, Fenalco – ANDI
(2) Informe Venta Autopartes, 2018, Asopartes
(3) Vehicle bodies and chassis are not included in auto parts sales
(4) Manual Estadístico 37 "El Sector Automotor Colombiano 2017”- Acolfa
(5) Colombian Vehicle Magazine “Motor”, Edition 715, 2019
(6) Informe Venta Autopartes, 2018, Asopartes
(7) Parque Automotor Colombia, 2018, Andemos
(8) Manual Estadístico 37 "El Sector Automotor Colombiano 2017”, Acolfa
(9) Informe Sector Automotor up to December 2018, Fenalco – ANDI
(10) Statistics Bureau - DANE; Global Trade Atlas - Colombian Exports Autoparts
(11) Global Trade Atlas, Colombian Imports Autoparts
(12) Informe Hurto de Vehículos, December 2018 – ASOPARTES
(13) Colombia Autos Report 2017, Business Monitor International; El Tiempo Article, March, 2019
(14) BBVA Research "Automobile Market Outlook, Colombia 2018” Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.