Investment in Automotive

Automotive Investment in Colombia

 

Colombia is the ideal destination to develop a platform for manufacturing and for the assembly of vehicles, trucks, buses, motorcycles and automotive spare parts, destined to supply both the domestic and regional markets.

  • The automotive industry is comprised of the activity of assembly (light vehicles, trucks, buses and motorcycles) with the presence of eight vehicle assembly plants.
  • Colombia is the fourth largest producer of vehicles in Latin America, with more than 450 thousand units assembled in the last 5 years.
  • During 2017, Colombia produced 112.003 units and registered sales that surpassed 235.000 units. It is expected that in the following five years, vehicle sales will have a 7.7% average rate growth.
  • The vehicle sale growth will be driven by a broad access to the financial market, middle-class growth and an increase in the disposable income.
  • The cargo vehicle segment presents one of the best growth prospects in the coming years. There is also an opportunity in the transportation of passengers for the renewal of the buses of BTR systems in main cities.
  • Colombia is the second largest producer of motorcycles in the region. 94% of the motorcycle market in Colombia is local production. Is expected a growth of 9.7% (CAGR) in the production of motorcycles between 2018 and 2022.
  • Colombia has competitive advantages in the auto part sector such as highly qualified exportable offer integrated by national and foreign companies, certified with the highest international quality standards under TS16949 norm. Besides this, there is the availability of qualified human capital at competitive costs and specialization in the different segments such as frames and electrical system.
  • National government offers incentives for the industry like PROFIA.
  • Companies like General Motors, Renault and Foton had invested in Colombia.

 

These are just some of the reasons to invest in the Automotive Industry. We invite you to learn additional details about Colombia and why it is the perfect destination for your projects.

Download here:

pdfInvestment in Automotive Sector 20161.95 MB

Investment Opportunities

  • Assembling plants for commercial vehicles, cargo and motorcycles to meet local market and export to the region. The country has specialized in the production and assembly of vehicles and motorcycles to meet local and external demand
  • Bus assembly: Potential to meet the demand for bus replacement for integrated transportation systems About 1.400 new buses are expected for the BRT system in Bogota.
  • Vehicles: the SUV segment registers increasing sales. Participation went from 20% in 2012 to 31% in 2017.
  • Motorcycles: every year, more and more households acquire motorcycles as their main way of transport.
  • Opportunities for auto and motoparts companies. The installation of companies that produce this kind of products, will allow meeting the needs of assemblers and sparing parts market.

Regions

Learn about the principal regions that offer investment opportunities in the automotive industry:

  • Antioquia
  • Risaralda

Success Stories

  • Japanese company Isuzu installs its first overseas engine re-manufacturing plant in Colombia
    In partnership with Colombia's National Truck Service, the Japanese company created Isuzu Remanufactura de Colombia, a company that works in the remanufacturing of Isuzu truck and bus engines. This is the company's first plant of this kind outside of Japan and promises to be a pioneer in the remanufacturing of engines in Latin America.
  • Japan's Castem chooses Colombia to install its first plant outside of Asia
    The Japanese company specializing in precision tool foundry for the automotive, medical, and construction industries is moving forward with the commissioning of an industrial plant on the western side of Bogotá.
    It will be the multinational's first plant outside of Asia. One of the reasons that the Japanese company chose Colombia is for its strategic location as an export platform to Mexican and US markets, where it plans to export goods in the future.
    To begin, the company invested US $5 million and began its operations in the free-trade zone of Intexzona, on the western side of Bogotá, creating 50 jobs. The investment contributes to the transfer of precision material foundry technology, innovation, and knowledge in order to increase competitiveness in this sector in Colombia and in the region.
  • Hero MotoCorp, growing with Colombia
    After considering strategic sites such as Brazil, Argentina, and Central America, in 2014 the Indian company Hero MotoCorp chose Colombia as the location for its first plant abroad and began construction in Villa Rica, Cauca, in order to strengthen its direct presence in the region.
    This was the multinational's first experience abroad and was a decision brought about by their growth strategy. It chose Colombia's Pacific region as a favorable place for its development due to its strategic and equidistant location between North and South America.
    Thanks to ProColombia, Hero MotoCorp learned the benefits of being present in Colombia derived from the effective free trade agreements with Peru, Chile, and Mexico—fellow member nations of the Pacific Alliance—and other markets such as Central America; the country's macroeconomic stability over the last decade; the potential for developing partnerships for distribution; tax incentives for free-trade zones; and the current double taxation agreement between Colombia and India.
    In 2014, company CEO Pawan Munjal was present when the first stone was placed in the Colombian plant. After an investment of US $70 million, the plant became operational one year later.
    Since its entry into Colombia, the firm has created more than 2,000 direct and indirect jobs, many of them filled by employees from the Villa Rica region, Cauca, a population that was affected by the armed conflict in the past.
    The firm has begun exporting motorcycles from Colombia to Central America—specifically to the markets of Guatemala and El Salvador. The motorcycles' assembly involves 25% nationally produced parts and 75% imported parts. In the medium term, one of the company's objectives is to develop 100% Colombian products.
  • GM strengthens investments for exports to Brazil and the Andean market
    General Motors, one of the main vehicle assemblers in Colombia, decided to invest US $112 million in its Colombian plant to assemble new vehicles, both to supply the local market and also to make the most of the automotive agreement signed with Brazil. The investment not only includes a production line for a new model, but also includes improvements to the current plant to increase the company's competitiveness. In the coming years, GM expects to export about 2,000 initial units of a new model to Brazil, fulfilling the commitment made to the President of the Republic to increase exports.

Just two of the reasons to invest in the automotive industry here in Colombia are in assembly and auto-parts, contact us for further information and other potential investment opportunities. 

 

Investment Specialist:
Manuel Salgado: This email address is being protected from spambots. You need JavaScript enabled to view it.

Maria Clara Pérez

At PROCOLOMBIA we cater to international companies, large enterprises and foreign government agencies interested in investing in Colombia.

Due to the nature of our activities,we do not attend to individual or personal investment requirements.

We suggest you review our Frequently Asked Questions on Investment in Colombia before you send us your inquiries.

If you are a corporate investor, please fill in our contact form.

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