just-auto.com

EXCLUSIVE: COLOMBIA: Tariff rumours hit sales

By just-auto.com editorial team | 15 December 2006

Speculation over the effects of a trade agreement signed between Colombia and United States caused a downturn in Colombian vehicle sales last month.

Econometría said 3.4% or 738 fewer vehicles were sold compared to October.

The trade agreement actually said that, in the next 10 years, there will be a gradual VAT and tariff decrease between the two countries, beginning 1 January 2008. Right now, tariffs are about 35% on most imported cars.

But some media said things like "tariffs will fall to zero on New Year's Eve", gossip spread and sales fell.

Nonetheless, the Colombian market is up 38.4% YTD with 182,336 vehicles sold. Best improving brands were Ssangyong (174.5%), Subaru (153.9%), Ford (68.0%), Kia (52.8%) and Daihatsu (50.3%).

The general industry view about next year's sales suggests another 10% hike due to the country's economic growth (5% projected for 2007) and stable government policies.

Juan Vargas