Colombian Car industry

Colombia is the third-largest car producer in Latin America but it is also a net importer. The automotive industry accounts for 1% of GDP, with around 25,000 people employed in car assembly and around 100,000 in component production. In 2004 the value of total automotive sales rose by more than 50%, to reach US$2.5bn.

In terms of industry developments, General Motors and Renault, which dominate the Colombian market in terms of production, have decided to join forces under an alliance named the 'Competitiveness Management Model' (CMM). The carmakers have concluded a co-operation agreement, valued at some US$8mn, under which they will bring together the best management practices of both companies, and share equipment suppliers.

With respect to manufacturers, General Motors (GM) has earmarked investment of US$21.5mn for its plant in Colombia in a bid to boost capacity there. GM is seeking to increase output from 51,000 units to at least 100,000 units in 2007. Confirming its confidence in the country, GM is to increase the number of shifts at the plant to three and create 300 jobs.

In terms of industry developments, the Colombian government has approved new legislation that looks set to give auto trade between the country and Mexico a significant boost. In line with new rules that have the ultimate objective of gradually phasing out vehicle duties, some 4,000 Mexican autos weighing up to 8.8 tonnes may be imported into Colombia, subject to a duty of 8%. In 2007, the number will increase to 5,000 units, subject to a 6% duty. Parts will also enjoy lower duties until they too are eliminated in 2010.