AUTOMOTIVE INDUSTRY

“Colombia meets all the right conditions to be an significant player in vehicle production worldwide, and the country could have a solid and e cient automotive industry that generates high-quality jobs.”

Juan Manuel Santos,PRESIDENT OF THE REPUBLIC OF COLOMBIA

PRODUCTION AND MARKET COMPOSITION

Colombia is the fourth greatest producer of vehicles in Latin America, with more than 130,000 units assembled per year. Acolfa, 2015.

Colombia has a wide network of manufacturers and distributors of parts for cars and motorcycles with capacity to serve foreign markets.

Colombia can boast the presence of recognized assemblers such as: Renault, General Motors, Hero, Toyota-Hino, Susuki.

Colombia is the second largest producer of motorcycles in the region after Brazil with more than 660 thousands units. Acolfa, 2015

Libertad y Orden

INCREASE IN DEMANDAND SALES IN THE SECTOR

SALES OF VEHICLES IN COLOMBIA PRODUCTION OF MOTORCYCLES IN COLOMBIAThousands of units Thousands of units

Source: ANDI and Business Monitor Internationale = estimated

In 2014, sales of vehicles registered a record of more than 328 thousand units. ANDI, 2015.

Sofasa-Renault and General Motors Colmotores are the assembly plants with the greatest volume of production and vehicle sales in the local market. In commercial cargo vehicles the leader in production and sales is Hino.

Motorcycle production almost doubled between 2010 and 2014, recording an average annual growth of 16%. Produc-tion of motorcycles represented on average around 94% of apparent consumption, while imports were 6%.

Between 2015 and 2019, vehicle sales are expected to grow at an average rate of 5.8%, thus sales will exceed 430,000 units. Business Monitor, 2015

66% of vehicles sold in Colombia are imported and 34% are assembled. ANDI, 2015

Sales of utility vehicles registered the best performance among the di�erent kinds of vehicles sold in Colombia, followed by commercial passenger vehicles and cargo vehicles.

2010

253,9

324,6 316,0 293,8328,5 350,9 362,8 381.0 398,7 436,0

2011 2012 2013 2014 2015e 2016e 2017e 2018e 2019eSource: Acolfa and Business Monitor Internationale = estimated

2010

390,3516,7 553,6 625,1 662,6 672,6 678,6 685,4 687,5

2011 2012 2013 2014 2015e 2016e 2017e 2018e

in Colombia, mainly in the Pacific region, will permit organizing the productive chain to achieve logistic and scaling advantages for exporting vehicles and auto parts.

PROJECTS THAT IMPACTTHE AUTOMOTIVE INDUSTRY

COLOMBIA AS A VEHICLE EXPORT PLATFORM

Colombian vehicle exports are mainly cargo vehicles and automobiles to Latin American countries such as Mexico, Ecuador and Peru. DANE, 2015

As a result of the free trade agreements Colombia has achieved

of commercial passenger and cargo vehicles, utility vehicles and motorcycles, to countries such as Mexico, Peru and Chile.

agreements, the development of the manufacturing industry and the road infrastructure projects that the Colombian Government is implementing, will encourage demand for freight vehicles, since 73% of cargo is mobilized by land.

182,885 to 360,879 vehicles. Cargo transportation is comprised of 73% trucks. Colfecar, 2015

country will mean an increase in demand for commercial passenger vehicles.

Between 2010 and 2014, motorcycle exports from Colombia increased fourfold from USD 4.3 million to USD 17.1 million. In 2014, exports were up 12% from 2013. DANE, 2015

In 2014, the number of traditional transport vehicles in service decreased by 13%, while those belonging to the integrated transport systems increased by 46%. It is expected that by 2020 the �eet will reach approximately 20,000 buses.

AUTO PARTS MARKET UNDER DEVELOPMENT AND WIDE RANGE OF PROVIDERS OFORIGINAL AND SPARE PARTS

OTHER FACTORS FORINVESTING IN THE SECTOR

COLOMBIAN EXPORTS OF AUTO PARTS 2010-2014, USD MILLIONS

NUMBER OF GRADUATES IN AREAS RELATED TO THE AUTOMOTIVE INDUSTRY 2010-2014

corresponds to graduates in Mechanical Engineering, Industrial Engineering, Electronic Engineering and related fields.

Source: Productive Transformation Program.�e country has specialized in the production of a set of auto parts that allows it to respond to the needs of the assembly companies and demand of the replace-ment market.

Production in the auto part sector doubled over ten years, going from USD 414 million in 2002 to USD 945 million in 2012, recording an average annual growth rate of 10%.

�e main manufacturing companies are located in the center of the country, close to the automobile assembly plants, in Cundinamarca, Valle del Cauca y Antioquia.

Exports of auto parts are diversi�ed in terms of products with around 140 tari� positions, and are mainly car batteries, tires and security windows. Ecuador, Venezuela, United States, Mexico and Peru are the main destinations for exports of autoparts.

Skilled labor: the annual average of graduates in areas related to the sector is around 30,000. Labor Observatory, 2015

�e hourly wage in the manufacturing industry in Colombia is the second lowest in the region with USD 2.41. IMD- World Competitiveness Yearbook 2015

Colombia o�ers the following incentives that speci�cally bene�t the automotive industry: (1) Automotive Industry Promotion Program (PROFIA); (2) Assembly System for the Automotive Industry resulting from the Andean Automotive Agreement; (3) Free Trade Zones.

20142013201220112010

449,7

491,4454,0

367,3327,7

20142013201220112010

18.23526.337

30.398

33.580 33.345

Bogota is the main center for the industry, with 5 of the 8 assembly plants in the country.Bogota has the largest passenger car �eet in Colombia. In 2013, with more than 1.8 million cars, Bogota accounted for 39% of the overall Colombian �eet.Bogota accounts for 37% of all new vehicles registered in the country.�e city has more than 100 auto parts companies, which produce 85% of the auto parts industry of the country.Source: Invest in Bogota

Source: Invest Paci�c

Opportunities for assembling buses, trucks, light vehicles and motorcycles.Ideal location to meet the domestic and international markets by having the main port on the Paci�c Ocean.�e Technological Development Center for Automotive Industry (CDTIA-TECNNA), located in the city of Cali, aims to increase innovation, productivity and competitiveness of the auto parts industry and vehicles of Colombia.Opportunity to manufacture auto parts: the region of Valle del Cauca is a leading manufacturer of electric batteries, tires and other rubber products.

Opportunities for assembling buses, trucks and light vehicles.Regime for competitive incentives: �e development of the free zone in Pereira will allow automotive companies to take advantage of the growing domestic market and the possibilities for export to the region due to its location near to Paci�c Ocean.�e development of the metalworking sector in the region is an important factor to boost production of machinery and transport equipment.Opportunities in manufacturing parts

Opportunities for assembling buses, trucks and light vehicles.

Port of entrance for CKD material coming from Europe and North America.�e department's strategic location on the Caribbean coast allows easy access to the market of Central America and the Andean region.�e strengthening of the metalworking industry in the department is a factor that enable the development of auto parts production projects.Source: ProBarranquilla

COLOMBIA, A COUNTRY WITH MULTIPLE DEVELOPMENT HUBS

VALLE DEL CAUCA

CULTURAL COFFEE LANDSCAPE:

CARIBBEAN:

CUNDINAMARCA

Four

LARGE FOREIGN COMPANIES HAVE CHOSENCOLOMBIA AS A PLACE TO INVEST

General Motors-Colmotores. Hero. Baterías MAC y Jhonson Controls.

invested USD 200 million in its industrial Free Trade Zone to construct a stamping/ cutting and folding plant.

production in the region of Valle de Cauca has established a Joint Venture with the U.S. company Johnson Controls, the main producer of batteries worldwide.

in the manufacture of motorcycles, built a production plant in order to become a distribution platform to Central and South America because of the suitable logistical conditions.