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.
From January to June of this year 35,157 new and used vehicles came into the country, registering a fall of 17% compared to the first half of 2017.
According to figures from the Ministry of Finance, between the first half of this year and the same period in 2017, the number of new vehicles imported into the country went down by 14%, going from 28,203 units to 24,395.
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.
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.
About 50% of the 147,000 new vehicles sold between March 2016 and December 2017 were financed by banks and financial institutions, for close to $1 billion.
An analysis of the vehicle fleet in Costa Rica by the Business Intelligence Unit at CentralAmericaData reveals that placement of loans for vehicle purchases during the period between March 2016 and March this year amounted to $1.2355 billion.
Of the total number of vehicles circulating in the country in January 2017, 61% corresponded to automobiles, 21% to motorcycles, 11% to light-duty vehicles and 3% to heavy loads.
Figures from the"Central American Vehicle Park"report, prepared by CentralAmericaData's Business Intelligence Unit, indicates that in January 2017, 1.5 million vehicles were circulating, of which more than half corresponded to automobiles.
In December 2015, 22% of the vehicles circulating in the countries of the region were between 1 and 5 years old, and 19% were between 6 and 10 years old.
The report "Vehicular Fleet in Central America in 2015," compiled by the Business Intelligence unit at CentralAmericaData com details the age of vehicles circulating in the countries in Central America.
Of all vehicles circulating in the country at the end of 2015, 63% were automobiles, 19% motorcycles, 13% light duty vehicles and 3% heavy load vehicles.
Figures from the report "Vehicular Fleet in Central America" prepared by the Business Intelligence unit at CentralAmericaData.com, indicate that 1.3 million vehicles were in circulation up to December 2015, of which 63% were cars.
In the past five years used cars lost 24% of market share due to improvements made in installment terms and interest on loans for buying new vehicles.
The market for used vehicles in Costa Rica has seen five years of decline, lacking attractive incentives for imports and being at a competitive disadvantage to the new vehicles market.
In 2014, 84 000 new and used vehicles were sold in Guatemala, Costa Rica and Nicaragua alone, and it is expected that 2015 will close with an annual growth of nearly 10% across the region.
While the region has generally shown an upward trend in the marketing of vehicles, mainly new ones, the characteristics of each of the countries, particularly with regard to access to bank credit, makes the behavior of the auto market different in each.
The Costa Rican Automotive company has acquired a car dealership in Dallas, bringing the number of subsidiaries of the company operating out of Costa Rica to five.
The new branch in Texas, was born under the brand Atkinson Toyota South Dallas and is dedicated to marketing Toyota and Scion brands of cars. Purdy Motor plans to continue expanding its operations primarily in North America.
Used car importers argue that the Treasury is using the 2015 value of cars as a reference price when establishing the value of used vehicles.
The Costa Rican Chamber of Automotive Companies and deputies from the Libertarian Movement have filed an lawsuit and asked to meet with the Ministry of Finance to complain about the methodology being used to calculate the taxable value of used cars.
After 2013 recorded a decrease of 3.4% compared to 2012, sales of new and used cars from January to September this year increased by 6% compared to the same period last year.
Elfinancierocr.com notes that "... The Association of Importers of Vehicles and Equipment (Aivema) recorded that, in nine months, 27,161 units have been sold, including cars, pick up trucks, sports vehicles, vans and light trucks; 60 different brands in over 26 dealerships. In the same period in 2013, 25,609 units were sold. "
Under pressure from importers the government has lowered taxes for importing used motor vehicles, but diluted the reduction by increasing the notional taxable value.
Car dealers in Costa Rica are asking for the establishment of a new formula for calculating taxes on used vehicles.
Cars between 0-6 years old will incur a 30% selective excise tax with a tax burden of 53%, and those over 6 years old will incur a tax of 48% and have a tax burden of 73%.
From a press release from the Ministry of Finance in Costa Rica:
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