Mathilde Carlier
Research Expert covering transportation and logistics
Automotive industry in Colombia - statistics & facts
After Colombia's automotive industry became an emerging player in Latin America in recent years, it is now experiencing a period of decline. Amidst rising inflation, interest rates, and fuel prices, Colombian consumers are less willing to spend their money on buying automobiles. As of 2023, new vehicle registrations have fallen to below pandemic levels. Like the Argentine automotive industry, the sector depended on international investments to catch up with an increasing car demand. With the recent announcement by General Motors to shut down their plant in the country, it signals a possible end to Colombia’s reliance on foreign investments and a period of increased self-reliance.
Part of Colombia’s new policy is boosting market recovery through the country’s fleet electrification. Electric and hybrid vehicles did not record the same decline in sales as fossil fuel vehicles during the COVID-19 pandemic and have soared since 2021. In 2023, nearly 31,500 of these vehicles were registered in Colombia. This represented an increase of 13.1 percent compared to the figure reported in the previous year. The Japanese multinational car company Toyota is at the forefront of this trend, selling some 9,772 electric and hybrid vehicles in Colombia in 2023. This advance in electric vehicle sales has mainly resulted from the elimination of import tariffs established by the government in December 2019—part of a series of measures to reach the Paris Agreement emission goals. With the decree in effect until 2027, this trend will likely gain ground in the coming years.
Dependence on foreign investments
Automobile production in Colombia had slowly been recovering from the economic impact the COVID-19 pandemic had on the industry: In 2022, their annual motor vehicle production grew to nearly 51,500 units. Following this period of growth, production fell to nearly 34,700 units, less than pandemic levels. International manufacturers heavily contribute to this sector and its economic recovery. Colombia established itself as a regional manufacturing market for major companies such as Renault and Toyota. These two companies have dominated the Colombian market in vehicle sales and production. To boost foreign investment in the industry even further, the government has focused on developing industrial parks and free trade zones. However, and perhaps as a result, the South American nation still relies heavily on external sources to meet its demand, with the value of automotive imports far exceeding that of exports. While the Colombian automotive market is ripe for foreign investments, it has also been deeply impacted by the volatility of exchange rates. The economic instability of the past years paired with an automotive agreement with Brazil which created an imbalance in the Colombian sector until its end in 2024. To compound this crisis, the demand for vehicles is decreasing as was mentioned. This increases the challenges faced by the country to diversify its vehicle offer and keep its automotive sector attractive for foreign investments.Electric vehicles are on the rise
The passenger car revenue forecast projects that this market will be worth some 4.22 billion U.S. dollars in 2028, down from some 4.5 billion in 2023. This slow fall is dependent on a wide range of factors, including the overall increase in costs associated with traditional-fuel vehicles. In 2023, over 910,800 used vehicles were sold in Colombia, a ratio of nearly five used vehicles per new vehicle sale. The 2023 used vehicle sales declined by about 20 percent from the previous year.Part of Colombia’s new policy is boosting market recovery through the country’s fleet electrification. Electric and hybrid vehicles did not record the same decline in sales as fossil fuel vehicles during the COVID-19 pandemic and have soared since 2021. In 2023, nearly 31,500 of these vehicles were registered in Colombia. This represented an increase of 13.1 percent compared to the figure reported in the previous year. The Japanese multinational car company Toyota is at the forefront of this trend, selling some 9,772 electric and hybrid vehicles in Colombia in 2023. This advance in electric vehicle sales has mainly resulted from the elimination of import tariffs established by the government in December 2019—part of a series of measures to reach the Paris Agreement emission goals. With the decree in effect until 2027, this trend will likely gain ground in the coming years.
