It has been almost 13 years since Colombia signed the last update of the Andean Automotive Agreement (AAA) under which the country, Ecuador and Venezuela increased local content in their assembly plants to 34.5% and kept a ‘no tariffs’ policy for trade between the countries.
Venezuela pulled out of the agreement ‘de facto’ in 2007 due to political differences with Colombia but the AAA remains valid. Trade between Colombia and Ecuador is working just fine with the exchange of completed vehicles assembled in both countries’ factories (GM, Renault, Mazda, Kia).
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Due to the several FTAs signed by Colombia in the past few years with Europe, US and, soon, Korea, the Colombian Government, through its commerce and industry ministry, announced the ‘opening’ of the automotive policy. Key changes: first, assemblers won’t be obligated to fulfill the OEM local content – so they can buy OEM parts overseas – and, second, assemblers will have to pay tariffs on CKD kits.
To support Colombian assemblers and make them competitive in a global context, central government is investing in a research and development centre that will be capable of evaluating materials, quality and design.
The commerce and industry ministry is working with assemblers and OEM producers on a ‘Productive Transformation Programme’ to improve logistics, quality, distribution, and so on.
Even though nothing has been signed nor published, just-auto.com has learned the measures will take effect next year.
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By GlobalData
