BOGOTA Oct 21 Colombia is studying reducing or
eliminating tariffs on imported automobile components to bolster
the local car industry, which assembles foreign makes including
Chevrolet, Renault and Mazda, the finance minister said on
Reducing or eradicating protective tariffs would make it
more difficult for local component manufacturers to compete but
would lower the cost of automobile assembly overall, helping
locally-produced cars regain some market share lost to imports.
An overvalued peso has hindered industrial output in Latin
America's No. 5 economy in the last few years, making it the
laggard sector in an economy that since 2010 has achieved annual
growth consistently above 4 percent.
"I think that to give some competitiveness to this sector,
we will have to go in the direction of allowing auto parts to
come in without restriction from any country so that the
assembly of vehicles in Colombia does not disappear," Mauricio
Cardenas told reporters in Bogota.
Cardenas said local assembly of cars, some of which are
exported to neighboring countries in the Andean region, made an
important contribution to the economy and to job creation.
Colombians buy around 300,000 new cars each year.
Sales of cars made abroad overtook those of locally
assembled vehicles during the peso's gradual strengthening in
the last few years which lowered the cost of imports. Roughly
two thirds of new cars sold in Colombia are imported.
Colombia's Colmotores assembles General Motors'
Chevrolet cars while France's Renault models are made
by local company Sofasa. Japan's Mazda cars are
produced locally by the Colombian Automotive Company.
Colombia has been buying dollars regularly since February
through the central bank and by reducing foreign debt, measures
which have helped weaken the peso by 6.3 percent so far this
year, undoing part of its 9 percent appreciation in 2012.
The backdrop of improving security after a 10-year U.S.
backed military offensive that slashed the membership of the
country's two left-wing rebel movements, the FARC and ELN, led
to a wave of investment in oil and mining, one of the reasons
why the peso strengthened.
(Reporting by Nelson Bocanegra; Writing by Peter Murphy and