The Argentine government is working to negotiate a broader agreement on free automotive trade with Colombia and the talks are advancing, according to regional media reports. Argentina has proposed a duty-free interchange of vehicles over an eight-year period, similar to an agreement Brazil has secured with Colombia. According to the report, Argentine firms could export between 15,000 and 20,000 cars per annum to Colombia. Colombia is reported to be interested in pick-ups assembled in Argentina, while Argentina could export some completely knocked down (CKD) production of the Renault Duster, a small General Motors (GM) vehicle, or Hino commercial trucks. The report also notes that Argentina is looking to have the agreement finalised by 21 April, the same date that the Brazil-Colombia agreement is scheduled to be signed.
Significance: According to IHS Automotive production forecast data, Colombia did not export vehicles to Brazil or Argentina in 2015, though exports to Brazil are forecasted to begin in 2016. Argentina exported the Ford Ranger, Mercedes-Benz Sprinter, Peugeot 308, Renault Fluence, Toyota Hilux and Hilux SW4, and Volkswagen Amarok to Colombia, involving a total of 6,120 vehicles, a decline of 30% compared with 2014. Colombia also saw vehicle sales decline to 267,821 units in 2015 from 296,047 units in 2014. With sales barely flat in Argentina in 2015 and declining in its largest export market, as well as conditions in many of its export markets causing declines in exports to most trading partners, the country's overall vehicle production declined in 2015 and is forecasted to continue to decline in 2016. Securing a free-trade agreement with Colombia could assist in countering this, but may add only incremental export increases for Argentina. An agreement on free automotive trade could serve to increase Argentine exports to Colombia, as well as help stop potentially losing exports to Colombia to Brazilian companies following the new Brazil-Colombia free-trade agreement. Brazil has a stronger production base than Argentina and will likely continue to provide Colombia with more volume than Argentina. In 2015, according to IHS data, Brazil exported about 15,000 units to Colombia and is forecasted to increase that number to nearly 25,000 units in 2018. In 2015, Nissan exported the most volume from Brazil to Colombia, moving 8,124 units combined of the March and the Versa.
