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Under the FTA agreement which entered into effect on May 15, 2012, some parts and auto parts currently have zero tariff to enter into the Colombian market. Other parts that face a tariff will be reduced to zero during the next 2-4 years, as will vehicle tariffs which currently sit at 10.5%.
Colombia does not allow imports of used vehicles or motorcycles, or used automotive parts. However, with the implementation of the FTA Colombia is accepting remanufactured automotive parts. Colombia has trade agreements with more than 30 countries, making the market more competitive. More than 100 companies compete in the automotive sector, with Mexico, South Korea, the United States, Japan, Germany, Brazil, and China having high market shares of imported automobile parts and vehicles.
Colombia is updating its vehicle safety regulations via Resolution 3752 (effective January 1, 2017) and Resolution 3753 (effective since the end of 2017). Once the technical specifications for these new requirements are released, importers will have to test their vehicles at a locally approved laboratory. The Colombia Ministry of Transportation is currently accepting self-certification in accordance with international technical standards certified in the country of origin until the new standards are released, and that there are accredited laboratories in the country.
In March 2013, Colombia imposed a one-for-one scrapping requirement as a condition for the sale and registration of new freight trucks. This policy cost an estimated $750 million in lost U.S. truck exports during the past three years, according to industry representatives. In February 2015, Colombia’s
Market Entry
1
Secure an agent, representative, or distributor in Colombia, which requires a contract that meets the provisions of the Colombian Commercial Code.
2
Focus on formality, personal relationships, and trust when negotiating agreements and contracts.
3
Perform direct marketing and personal visits to potential buyers. Printing and distributing materials to prospective customers, is essential.
4
Keep good after-sales service arrangements, which are important in Colombia, not only in the original buying decision, but also in maintaining the sales relationship.
5
Consider the product’s quality, financing, and price, supported by extensive advertising campaigns, which play an important role in a Colombians’ buying decision.
Barriers
market entry