Colombia is a major player in the regional automotive market, along with Brazil and Argentina. The Colombian automotive sector has experienced a decrease of six percent from 2016 to 2017, largely as a result of the drop in global oil prices, devaluation of the Colombian Peso, and slowed growth of GDP. Moreover, a tax reform package passed in 2016 raised the Value Added Tax from 16% to 19%, which has put a damper on consumer spending in general. Auto parts sales also declined by 1.2% from 2016 to 2017, totaling $3.84 billion USD. According to the leading automotive parts association in Colombia, Asopartes, this decline can be explained by the weak Colombian Peso, an unfavorable exchange rate leading to fewer imports, and reduction in trade with Venezuela.
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. Out of those, 912,142 were registered for transportation (freight and passengers) and 7.5 million were motorcycles (57%). The automotive sector contributes four percent of the country’s GDP and employs about 22,000 people, according to a report by BBVA. Colombia currently ranks as the third largest automobile assembler in South America. After Brazil, Colombia is the second largest motorbike assembler in the region, with annual output of 567,000 motorbikes. This satisfies 97% of Colombia’s demand for motorcycles.
Summary
Norcia Ward
U.S. Embassy Bogota, Colombia
I 45 I
Colombia