COLOMBIA: Automotive market boost threatened by government plan

By Juan Vargas | 3 October 2011

The 42% growth in the Colombian new car market year to date and a forecast of over 300,000 units for the full year is making the government creative: due to the dense traffic jams in most principal cities, transportation vice minister Felipe Targa has said he is going to insert in the new National Transportation Code a rule to limit car sales by forcing buyers to obtain registration plates at auction.

Such a system is now common in parts of Asia such as Singapore and some major cities in China.

Critics didn’t wait to protest against the initiative and through blogs and internet forums they agreed the problem was not so much the fleet size but the weak and obsolete infrastructure.

Oliverio Enrique García, president of Andemos, told just-auto the proposal contradicted comments by President Santos, just back from Korea and Japan, saying he wanted to increase trade with those countries which export vehicles to Colombia.

The Colombian vehicles to people ratio is among the lowest in South America – just 5m vehicles to transport 45m people. This one vehicle per nine persons ratio is just above that of Bolivia, the poorest country in this region.

On the other hand, Colombia only has 1,400 km of multi-lane roads while Ecuador has triple that. This is the real problem behind Colombian traffic jams – inadequate road space.

To make things worse, Targa’s boss, transportation minister Germán Cardona, has said people won't be able to choose a registration plate ending with an odd or even number. That loophole has been used for some years in the capital Bogota where road use on a given day is determined by odd or even vehicle registration plate last numbers. People simply buy a second car and choose a different plate number from their first car to get around that.

The minister “is forgetting that transportation is a fundamental right of citizens and people would buy a second car not because of fashion or laziness but for the real need for transportation,” an analyst, requesting anonymity, told just-auto.

Meanwhile, the Colombian statistics service said GDP grew 5.2% in the first eight months of 2011, spurred by consumption and investment.

In the January to August period, 213,516 new cars were sold, up 45%.

Chevrolet, with market share of 33.3%, was the top brand followed by Renault, 14.8%; Hyundai, 9.0%; Kia, 8.5%; Nissan, 7.2%; Toyota, 4.2%; Mazda, 4.2%; Ford, 3.2%; Volkswagen, 2.6% and Dodge, 0.9%.

The best growth in the same period was booked by Land Rover, 272.4%; Citroen, 117.5%; Alfa Romeo, 103.4%; Ford, 101.6%; Seat, 95.6%; Nissan, 95.4%; Volvo, 84.8%; Peugeot, 78.7%; Porsche, 73.3%; Skoda, 62.6% and Dodge, 59.40%.