Automotive is a best prospect industry sector for Colombia. Includes a market overview and trade data.
Last Published: 8/1/2017
Overview
Colombia Automotive Production Data, 2014-2016
Auto Sector (in units)2014201520162017 (estimated)
Sales  328,526281,885253,651264,000
Local Production 110,37487,38695,11999,764
Imports 218,152178,346158,532176,400
Exports 25,75329,58438,73145,000
Total Market Size 302,773236,148214,920231,164
 
Colombia Automotive Parts Sales Data, 2014-2016
Auto Parts (USD millions)201420152016
Sales3,8173,9703,895
   
 
 


 
Colombia Automotive Parts Production Data, 2014-2016
Auto Parts (USD millions)201420152016
Local Production355321-
Imports 4,0223,5673,241
Imports from the United States829772525
Exports444425366
Total Market Size 3,9333,463 -
Exchange Rates: 1 USD1,997.832,748.783,050.15
Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
 
Colombia Automotive Market Sales and Market Share by Vehicle Category, 2014-2016
Category 2015 Sales2016 Sales2015 Market Share %2016 Market Share %Variation in Sales Volume %
Private cars 147,364137,80652.354.3(2)
SUVs73,17171,39426.028.1(2.1)
Trucks and buses21,54420,2607.68(0.4)
Pick ups15,28412,2155.44.8(0.6)
Taxis 15,1919,7725.43.8(1.6)
Vans 9,3312,2043.31(2.3)
Total 281,885253,651100100 
Sources: BBVA Research – Colombia Automotive Outlook 2015; Informe Sector Automotor up to December 2016; Fenalco – ANDI; Informe Venta Autopartes, 2016, Asopartes; Colombian Vehicle Magazine “Motor”, Edition 667, 2017; Manual Estadístico 36 "El Sector Automotor Colombiano 2016”; Acolfa Colombia Autos Report 2017; BMI Research

Colombia is one of the largest automotive markets in South America, next to Brazil and Argentina. Although 2014 was Colombia’s best year for auto sales in the past five years, the sector experienced a decrease of 10 percent from 2015 to 2016. The decrease was mainly caused by a drop in global oil prices, the devaluation of the Colombian Peso and a slowdown in economic output (GDP), which was estimated at two percent for 2016. Moreover, a tax reform package passed in 2016 raised the Value Added Tax from 16 percent to 19 percent, which has put a damper on consumer spending in general.

Auto parts sales totaled USD 3.89 billion in 2016, a two percent annual decrease over 2015. According to the leading automotive parts association in Colombia, Asopartes, the decrease can be explained by a relatively weak Colombian Peso, the fact that several auto parts importers suspended imports due to the unfavorable exchange rate, and a reduction in trade with Venezuela, where auto parts sales have dropped significantly in recent years.

At the end of 2016 there were 13 million vehicles in Colombia, according to data from the Ministry of Transportation and the automotive association Andemos. Of those, 912,142 were registered for transportation (freight and passengers) and 7.4 million were motorcycles (57 percent). Not including motorcycles, 83 percent of Colombian vehicles are for private use, 16 percent are in public service, and one percent is for official use. 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 2015 estimates that the automotive sector contributes four percent to the country’s GDP and accounts for nearly 22,000 jobs. 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 567,000 units (domestic production satisfied 97 percent of local consumption in 2016).

A number of international auto manufacturers currently produce vehicles in Colombia. General Motors (Chevrolet, Isuzu, and Volvo), 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. General Motors has recently announced a significant investment in its local operations over the coming four years, which is likely to boost the country’s overall auto output.

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 percent in 2016 and it ranked fifth in top-selling brands in the country (18,145 units sold).

More than 100 brands and 700 models of vehicles are found in the Colombian market. The biggest seller is Chevrolet (24 percent market share), followed by Renault (20 percent market share), with Kia in third place (10 percent market share). Nissan has grown at a fast rate in recent years and is currently in fourth place (7 percent market share).

In 2016, the ratio of nationally produced vehicles was 37 percent. The other 63 percent of vehicles were imported from Mexico, Japan, South Korea, United States, Brazil, Germany and China. Colombian local production of vehicles 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 (assembly plants) in Colombia are concerned by 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 is currently negotiating agreements with Israel and Panama. Further agreements are currently under discussion 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 2015, the annual production of automotive parts in Colombia was equivalent to USD 321 million, while exports accounted for USD 425 million. The main destinations for Colombia’s exports of auto parts are the United States, Ecuador, Peru, Mexico, and Chile. Imports represented USD 3.56 billion and were dominated by China (25 percent), the United States (16 percent), Japan (7.8 percent), Brazil (7.6 percent), and Mexico (five percent).
 
The Colombian automotive parts industry faces several challenges, such as stolen vehicles, counterfeit products and smuggling. During 2016 a total of 45,461 vehicles (including motorcycles) were stolen in the country, representing an increase of 32.7 percent in comparison with 2015. This has created an illegal market of auto parts valued at approximately USD 680 million in 2016. The Government of Colombia is promoting awareness campaigns through national television to prevent the purchase of stolen auto parts, and it is also enforcing legal measures for consumers who buy illegal (stolen and counterfeit) auto parts.

Leading Sub-Sectors
Best prospects for automotive parts and accessories are:
  • Brakes 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’ seventh 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 Colombian Central Bank continues to cut short term interest rates in 2017, a measure that might encourage commercial banks to lower auto loan rates.
  •  Auto parts
  • A The high vehicle import percentage represents good opportunities 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) that entered into force in May 2012, some parts and auto parts (which were previously assessed a tariff of 13 percent on average) currently enter the Colombian market tariff free, while tariffs on other parts will be reduced to zero over the next two to six 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 import 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 the import 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 as key in the country’s 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
Breakdown of end-users are as follows:
  • 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
Breakdown of distribution channels are as follows:
  • Dealers and distributors of imported vehicles 
  • eCommerce site to sell auto parts to end users; this is 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
June 7-9, 2017
Bogotá, Colombia

Web Resources
Norcia Ward-Marin 
U.S. Commercial Service Bogotá
Phone: 571-275-2703
Email: Norcia.WardMarin@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)
Government of Colombia
Ministry of Transportation
National Industrialists Association (ANDI)
National Transit Registration System (RUNT)
ProColombia (Export Promotion, Tourism and Investment)

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Colombia Automotive Trade Development and Promotion