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Colombia, the Gem of South America

Wednesday, February 22, 2012 - 01:00
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On Oct. 21, 2011, the U.S. entered into a trade promotion agreement (TPA) with Colombia, opening this growing market to more U.S. goods, including automotive aftermarket products. Under the agreement, more than 80 percent of U.S. exports of consumer and industrial products to Colombia will become duty free immediately, with remaining tariffs phased out over 10 years.

According to the Office of the U.S. Trade Representative, the U.S.–Colombia TPA will support more American jobs, increase U.S. exports and enhance U.S. competitiveness. In addition, the U.S. findings of the latest HSBC Trade Confidence Index revealed 27 percent of U.S. foreign traders find Latin America represents the best opportunity for business growth in the next six months, compared to 26 percent of traders who selected the Chinese market.

 

The Colombian automotive market has great potential. In the past decade, Colombia’s passenger car population has increased nearly 13 percent, according to “World Motor Vehicle Market Report 2011,” the annual report published by the Automotive Aftermarket Suppliers Association (AASA) and the AASA Overseas Automotive Council (OAC). The report also notes the country’s total vehicle population increased by nearly half a million from 1.6 million in 2007 to 2 million in 2008.

Colombia is the fourth largest vehicle importer in Latin America, after Brazil, Argentina and Chile. Carmakers with Colombian manufacturing facilities include General Motors, Mazda, Mitsubishi, Renault and Toyota.

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The automotive sector is Colombia’s fourth most important industry, according to the “Automotive Resource Guide 2010-2011,” published by the U.S. Commercial Service. The United States has traditionally been Colombia’s major supplier of vehicles, automotive parts and accessories. Colombia imported $11.3 billion products from the United States in 2008.

The guide notes the automotive sector is gaining pace and reacting more dynamically, boosted by new production and assembly lines and a stronger demand for auto parts. Analysts expect an improvement due to President Alvaro Uribe’s economic policy, a stronger demand in China and Brazil for Colombian products and services, higher raw materials value and a favorable U.S.-Colombian pesos exchange rate.

Approximately 49 brands and some 249 models are found in the market, according to the guide. The following brands compete very actively in the Colombian import market: Chevrolet, Hyundai, Ford, Nissan, Skoda, Mitsubishi, Volkswagen, Kia, Toyota, Peugeot, Renault, Daihatsu, Honda, Citroen, Dacia, International, BMW, Mercedes-Benz, Dina, Renault, Kenworth, Mack, Dodge, Freightliner, Petteril, Audi, Agrale, Daihatsu, Samsung, Subaru, Nissan, Isuzu, Hino and Volvo.

The U.S. Commercial Service recommends the following guidelines for entering the Colombian market:
• Secure an agent, representative or distributor in Colombia, which requires a contract that meets the provisions of the Colombian Commercial Code.
• Focus on formality, personal relationships and trust when negotiating agreements and contracts.
• Perform direct marketing and personal visits to potential buyers supported by Internet communications, printing and distribution of materials to prospective customers, which are essential.
• 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.
• Consider the product’s quality, financing and price, supported by extensive advertising campaigns, which play an important role in a Colombians’ buying decision.

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The AASA Overseas Automotive Council also is a great tool for networking with Colombian and other international aftermarket businesses. OAC is the premier international community for all North American manufacturers and exporters and all international importers, distributors and agents who participate in the automotive aftermarket.

The Council will host an international event in Colombia Monday, June 4, through Wednesday, June 6. Planning is underway for the event, which will include member meetings and networking with current and prospective customers – details will be announced soon and the latest updates will be available at the OAC Web site, www.oac-intl.org.

The AASA OAC “2012 World Motor Vehicle Market Report” is one of the industry’s oldest and most respected global statistical analyses. The electronic report includes vehicle production and assembly, vehicle census summary and U.S. Motor Vehicle parts trade worldwide. It is available free to members and for $500 for non-members; more information is available on the “Publications” page of the OAC Web site, www.oac-intl.org.

On Oct. 21, 2011, the U.S. entered into a trade promotion agreement (TPA) with Colombia, opening this growing market to more U.S. goods, including automotive aftermarket products. Under the agreement, more than 80 percent of U.S. exports of consumer and industrial products to Colombia will become duty free immediately, with remaining tariffs phased out over 10 years.

According to the Office of the U.S. Trade Representative, the U.S.–Colombia TPA will support more American jobs, increase U.S. exports and enhance U.S. competitiveness. In addition, the U.S. findings of the latest HSBC Trade Confidence Index revealed 27 percent of U.S. foreign traders find Latin America represents the best opportunity for business growth in the next six months, compared to 26 percent of traders who selected the Chinese market.

 

The Colombian automotive market has great potential. In the past decade, Colombia’s passenger car population has increased nearly 13 percent, according to “World Motor Vehicle Market Report 2011,” the annual report published by the Automotive Aftermarket Suppliers Association (AASA) and the AASA Overseas Automotive Council (OAC). The report also notes the country’s total vehicle population increased by nearly half a million from 1.6 million in 2007 to 2 million in 2008.

Colombia is the fourth largest vehicle importer in Latin America, after Brazil, Argentina and Chile. Carmakers with Colombian manufacturing facilities include General Motors, Mazda, Mitsubishi, Renault and Toyota.

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