Cars, Spare Parts and the Price of the Dollar

In Costa Rica, companies in the automotive sector predict that eventual abrupt increases in the price of the dollar would have a greater impact on the spare parts market than on the sale of vehicles.

Monday, June 5, 2017

Most of the vehicle distribution agencies in the country agree that if the exchange rate continues its upward trend, a negative effect could be seen on the automotive spare parts market, since these are products that are imported in dollars but sold in colones, the local currency. In the case of vehicles, which are marketed in dollars, most companies believe that the dollar price increase has not yet had a significant impact, but they are focusing on advising their customers on how to manage the foreign exchange risk when taking out a loan to buy a car.

See: "Costa Rica: $ 1 Billion in Vehicle Financing"

Miguel Gorrías, Marketing Manager at Grupo Automotriz, a distributor of Ford and Volkswagen, explained to Nacion.com that "...since the beginning of the year a strong possibility has been seen in the price of the dollar going up, giving rise to the consequence, in the short term, of customers who are more sensitive to the exchange rate freezing or postponing their purchase. Equally, its not been ruled out that the increase will have a negative effect on prices of spare parts, because unlike vehicles, these are acquired in dollars but must be marketed in colones."

See also: "Costa Rica: Autoparts Business Growing"

"... Grupo Los Tres - a distributor of Volvo - is another company that believes that the sale of spare parts may be one of the hardest hit by the dollar price hikes. Axel Figueroa, general manager at the business group, said that in light of this, very calculated projections should be made regarding the costs of importing these products and there should be control over the fluctuation of the dollar versus the colón."

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Costa Rica, Panama and Nicaragua are the Central American markets which reported reductions in sales of new and used vehicles during 2018.

According to figures from the Ministry of Finance of Costa Rica, from January to November 2018 imports of new vehicles totaled 31,008 units, and used vehicles 17,134 units, registering falls of 12% and 23% respectively compared to the first eleven months of 2017.

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According to statistics from the Ministry of Finance in Costa Rica, 5,835 new and used units came into the country in the first five months of the year, which represents a 16% drop compared to the same period in 2017.

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In 2016 the imported value of spare parts for vehicles totaled $37 million, 9% more than the imports recorded in 2015.

Figures from the information system on the Auto Parts and Accessories Market in Central America, compiled by the Business Intelligence Unit at CentralAmericaData 

What and How Much in Guatemala´s Auto Market

December 2016

Suzuki S.A., Canella S.A. and Agencia y fábrica Honda S.A. are the three companies with highest number of commercial establishments dedicated to the sale of motorcycles, cars, and spare parts in the country.

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