COLOMBIA: FTA with EC will zero tariffs by 2018
Author: Juan Vargas | 11 March 2010
After three years and nine rounds of negotiation, Colombia has finally signed a free trade agreement (FTA) with Europe that includes the automotive segment.
The FTA has yet to be finally approved by the Colombian Congress and European Commission but, in practice, it will mean that European vehicles eventually can be imported tariff-free into Colombia by 2018.
Today’s tariffs are 35% on almost every imported vehicle but sources told just-auto this will be gradually reduced from 2011, by 5% every year, to zero after seven years.
“Nobody was satisfied with this agreement because Colombian assemblers saw their 10 year proposal reduced to seven, the European countries expected a limit of no more than five years and Colombian importers wanted immediate [tariff cuts],” said Oliverio García, president of auto association Andemos.
Meanwhile, 16,873 vehicles were sold here in February, up 14% on January and 8% on February 2009. Year to date growth was 7.4%, which indicates 200,000 units will be sold in the full year.
Revaluation of the Colombian peso versus the US dollar has made imports cheaper.
Mazda fell to fifth place by market share (6.4%) in February, overtaken by Kia (8.7%).
Mazda began to lose share around 10 years ago when it discontinued the 323 [predecessor of the 3] and lost a strong presence in the price-sensitive, entry level sector here.
Then, two years ago, the Venezuelan government banned Colombian trade, including vehicles, so the Japanese automaker lost competitiveness when it was forced to switch to importing the 6 instead of assembling it locally in Bogotá.
The top 10 remains dominated by Chevrolet and Renault, with Hyundai, Kia and Mazda battling for third, fourth and fifth, followed by Nissan, Toyota, VW, Ford and Mitsubishi. The premium segment is led by BMW, followed by Mercedes-Benz, Audi, Volvo, Porsche, Land Rover and Jaguar.
New model launches in the first two months have included BMW’s X5M and X6M SUVs, Hyundai's redesigned Tucson (iX35), updated Honda CR-V and Mazda CX-7 and an ‘urban’ two wheel drive version of the Toyota Fortuner.
Fiat's Alfa Romeo brand is scheduled for a Colombia launch next month.
Sectors: Emerging markets, Retailing, marketing & distribution, Vehicle manufacturers
Companies: Mazda, Kia, Hyundai, BMW, Chevrolet, Toyota, Renault, Nissan, VW, Ford, Mitsubishi, Mercedes, Audi, Volvo, Porsche, Land Rover, Jaguar, Honda, Fiat, Alfa
View next/previous articles
Currently reading -
COLOMBIA: FTA with EC will zero tariffs by 2018
11 Mar 2010 -
11 Mar 2010 -
Related research
Mazda company profile edition 2
This latest edition just-auto company profile is part of a major series of reports that will provide you with convenient and concise analysis on the world's largest component and vehicle manufacturers. Each individual company is profiled in a consist...
Intelligence set: Company profiles for the major vehicle manufacturers
This intelligence set packages together the latest 2009 editions of our company profiles covering the major vehicle manufacturers, using the latest and most up to date data available. It offers great value for money and contains essential information...
Japanese market for smart key systems on domestic vehicles
Japanese consumers are widely recognised as being early adopters of new technology and the Japanese market for smart key systems is no exception. In Japan, smart keys are now offered on all new models with fitment estimated to be ten times higher tha...
There are currently no comments on this article
Be the first to comment on this article