This is a best prospect industry sector for this country. Includes a market overview and trade data
Last Published: 10/28/2019
Table 2: Costa Rica Automotive Parts Manufacturing Data (Millions of U.S. Dollars)
 Total Market Size246210220221
 Total Local Production88859092
 Total Exports194183185188
 Total Imports352308315317
 Imports from the U.S.98818385
 Exchange Rate575603610620
   Data in millions of US$ Dollars.
Total Market Size = (Total Local Production + Total Imports) – (Total Exports)

Data Sources:
Total Local Production: Estimated. Importers/distributors of local manufacturers
Total Exports: Costa Rican Customs Directorate
Total Imports: Costa Rican Customs Directorate
Imports from U.S.: Costa Rican Customs Directorate
Exchange Rate: Average Rate by Year. Projected exchange rate for 2019 and 2020.

Local production is limited to small electrical and metal parts, batteries, electrical copper cable, hydraulic seals, filters (air/gasoline), steel leaf springs, aluminum and steel wheels, windshields, carpets, hoses, mufflers, bus bodies, seat covers and tires.  Major U.S. competitors in this sector are China, Japan, Mexico, South Korea, in that order.
During 2019, China for the first time is in first place alongside the U.S., both with 26% of the market of Auto Parts imports into Costa Rica.

Total imports in this sector decreased in conjunction with a general slowdown in the Costa Rican economy. Most people have kept their existing vehicles due to economic uncertainty.  Imports from last year decreased 21%, however it is expected to grow again through 2020-2021 as the economy recovers. 

Even though Costa Rica is an attractive market for auto parts, with poor road infrastructure and heavy traffic, it offers a wide selection of options.  It is mostly a price-driven market.
The surge on the imports of used low cost vehicles from Asian countries over the last years led to a growing increase in auto parts imports from China.    Industry sources indicate that U.S. share of the import market is expected to decline as competitive pressures rise.

Leading Sub-Sectors     
The number of cars in Costa Rica has more than doubled since 2006 to an automotive park of 1,794,658 vehicles registered up to Feb. 2018. 
1,166,042 (65%) corresponds to automotive vehicles; 589,037 motorcycles (33%), 20,918 Micro Buses (1%) and 9,661 Buses (0.5%).
The average age of a Costa Rican car is 16 years with 2003 models.

Used Vehicles
Most used vehicles imported to Costa Rica come from the United States.  The attractiveness of buying a used car previously used in the United States is closely related to how cars in the US have many features that new cars sent to Costa Rica are lacking.   Additionally, the purchasing price is very competitive and due to the good driving conditions in US roads, most cars still have lots of miles to roll in Costa Rica.

Lately, new cars have been increasing their participation in the automotive market in Costa Rica, with support from the local banking system with financing for new cars.  The automobile 10-day fair, Expo Auto, organized by the Chamber of New Car Importers (AIVEMA), has been very successful in past years helping new car dealers do a lot of business in one place.

Additionally, during 2019, a new regulation in place by the Costa Rican customs requires checking VINs and is not allowing many cars that have been used as police cars, rentals and others.  The Association of Importers of Used Vehicles (CCA) has been against this regulation as is not only stopping the imports of totaled cars but of many other categories of titles that do not cause any danger to Costa Rican users.

Costa Rican importers of automotive parts and accessories purchase their products in the U.S., although a significant portion of these items are not of U.S. origin. 

According to several Costa Rican importers of automotive parts, good sales opportunities continue for virtually all categories of products in this sector.  High quality, durability, availability and an assortment of vehicle parts, and fast delivery are the main factors for successful U.S. sales of these products.  In recent years, Chinese-made products have emerged as an alternate option for the Costa Ricans when importing auto parts

Electric Vehicles and Chargers
Costa Rica is the first Latin American country to sign a law incentivizing the purchase of electric vehicles (EV).  On January 25 of last year, Costa Rican President Solis signed a law to promote the adoption of electric vehicles through many tax breaks and other incentives.  The Ministry of Environment and Energy (MINAE) put regulations in place to implement the law.  Currently, out of the roughly 1.3 million automobiles in Costa Rica, only 750 are 100 percent electric.  The government projects that this number will grow because of the law’s incentives and that by 2035 Costa Rica will have over 100,000 electric cars on the streets.

The new law establishes many incentives for the purchase of EVs.  The law waives many taxes and duties for imported EVs based upon the value of the vehicle. The exemptions will be applied on a progressive basis, such that a vehicle that costs $40,000 would get the full exemption for the first $30,000 and the intermediate exemption on the remaining $10,000.  Press reports estimate that EV buyers could save between $5,000 and $10,000 based upon these incentives.  Beyond the initial tax benefits, EV owners will also benefit from tax exemptions for replacement parts, free parking at public parking meters, and the vehicles will not be subject to driving restrictions to reduce traffic.  Any companies that decide to manufacture EVs in Costa Rica will be able to import assembly and production equipment tax free. 

Since the ratification of CAFTA-DR, U.S. suppliers are now well positioned to expand their market share for automotive parts. CAFTA-DR better positions U.S. exporters to take advantage of this expanding market. Import taxes for automotive parts before CAFTA ranged from zero to 29.95 percent, depending on the product. Most of these import taxes disappeared immediately with CAFTA-DR approval; others were gradually reduced to zero import taxes over a period of 10 years.

Opportunities will be opening in other areas such as electric vehicle chargers, battery replacement batteries and servicing for electric vehicles.

Web Resources
CS Costa Rica Commercial Specialist Roy Fernandez

CS Costa Rica (U.S. Department of Commerce):

Association of Importers of Auto Parts – ACIRA

Costa Rican Importers of Used Vehicles –CCA

Costa Rican Association of Importers of Vehicles –AIVEMA

Movilidad Electrica (Oganization) – Electric Mobility Advocate

Costa Rican Customs Directorate, Ministry of Finance:

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More Information

Costa Rica Automotive Trade Development and Promotion