Smuggling Stalls Growth of Colombia’s Auto Industry
Large numbers of tires are smuggled into the country as a result of anti-dumping measures Colombia has taken against China, which ensure high tariffs on legal tire imports remain in place.
December 15, 2014
MEDELLIN, Colombia – The smuggling of auto parts and vehicles into Colombia is a billion- dollar trade that has long shackled the sector’s potential for growth.
This contraband trade now finds itself squeezed between market forces on one side and a government clampdown on the other, but industry opinion is divided over whether it will be enough to halt the smuggling wave.
The trade in contraband auto parts alone costs the Colombian automotive sector an estimated $2.3 billion a year, representing over one-third of 2013 sales, Colombia’s auto-parts industry association ASOPARTES estimates.
The contraband trade “generates unemployment, failure to pay taxes, the deaths of people that try to impede this crime and the reduction of profits for legally constituted businesses,” says ASOPARTES President Tulio Zuloaga.
Contraband auto-parts smuggling also can put consumers at risk as the products are of unknown origin and come with no guarantees of quality.
People “are buying products without proof of their safety, and this can have enormous consequences for their family in terms of vehicle safety,” says Juan Camilo Nariño, vice president-commerce at ANDI, Colombia’s business association.
According to ASOPARTES, the most commonly smuggled products are spark plugs, shock absorbers, brake parts, engine parts, batteries, vehicle stickers, terminals, bearings and tires. The products are sourced from all over the world, in particular from the U.S., Asia, Europe and Latin American countries such as Venezuela and Panama.
Most parts enter using false or manipulated documents and pass through the country’s ports. The most popular entry point is the Pacific Coast port of Buenaventura, where 64% of the 61,878 units that authorities seized between January and September this year were discovered.
The parts commonly are sold in Colombia’s main cities, especially Bogota, Medellin and Cali.