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Colombia to boost credit for cars, home appliances
March 6, 2009 / 5:18 PM / 9 years ago

Colombia to boost credit for cars, home appliances

BOGOTA, March 6 (Reuters) - Colombia hopes to boost flagging sales of cars and home appliances by supplying nearly $200 million in consumer loans, part of efforts to stave off the global slowdown, President Alvaro Uribe said on Friday.

The measure is similar to credit-boosting steps taken in other South American countries where governments are trying to prop up the consumer spending that has played a key role in the economic expansion of recent years.

Colombia’s industry output plunged 9.2 percent in December and unemployment is rising, causing concern in the government and casting doubt on its target for 3 percent growth.

“We’ve seen a big deterioration in the automobile and parts industry and in sales of domestic appliances,” Uribe said in a televised speech.

He said the state development bank Bancoldex would supply the loans, which will have longer repayment terms and lower interest rates, for the purchase of Colombian-made, small cars and domestic appliances.

General Motors (GM.N), Ford (F.N) and Renault (RENA.PA) operate assembly plants in the Andean country, but sliding sales have led them to cut workers’ hours.

Colombia’s automobile industry has been hit by neighboring Venezuela’s decision to slash import quotas as well as a hike on import duties by Ecuador.

Argentina and Brazil, leading regional carmakers, have already introduced schemes to reduce the cost of borrowing for consumers and Brazil’s car sales rose for a third straight month in February.

Colombia’s car industry produced about 200,000 vehicles last year, but the government hopes to increase annual production by 7,000 vehicles. Sales of automobiles fell 13.2 percent in 2008 to 219,948 vehicles. (Reporting by Javier Mozzo; Writing by Helen Popper; Editing by Jan Paschal)

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