After two months of rumors, the Colombian government announced the new VAT scheme, under which some imported vehicles no longer attracted a 10% tax penalty.
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The new rules made CBU cars cheaper because, for passenger cars with engines up to 1.4 litres and costing no more than $US30,000 FOB, VAT fell from 35% to 25%, the same as paid on locally assembled models.
January sales rose 52.1% year on year but fell 2.9% compared with December ’06. 18,698 vehicles were sold by assemblers (65.5%) and importers (34.5%) and GM led with 7,366 units sold for a 39.7% market share.
The Daewoo, Opel, Isuzu and Suzuki CKD assembler and CBU importer was followed by Renault (17.0%), Hyundai (9.8%), Mazda (5.1%) and Toyota (4.8%).
Best improving vehicle brands so far this year are: Daihatsu (272.0%), BMW (169.2%), Mazda (143.0%), Mitsubishi (97.9%) and Kia (97.4%). This group consists of four importers and one assembler and reflects their improved prices due to the VAT change.
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By GlobalDataOther reasons to explain the good start to the year include the government announcement of 5.8% GDP growth for last year and an expectation of more than 6% for 2007.
Vehicle prices are expected to keep falling because, under the automotive agreement between México and Colombia signed in 1994, there will be 5,000 Mexican-made units attracting just 6% in tariffs (regular tariffs are about 35%).
Juan Vargas
