costa rica auto market briefing & trade mission · costa rica – automotive aftermarket...
TRANSCRIPT
Costa RicaAuto Market Briefing & Trade MissionWebinar – March 8, 2018
Agenda
WelcomeKellie Holloway, Sr. International Trade Specialist, U.S. Department of Commerce
Exploring New Markets in Latin AmericaAngela Chiang, Director International Affairs, Auto Care Association
General Overview – Costa RicaRoy Fernandez, Senior Commercial Specialist, U.S. Commercial Service Costa Rica
Automotive Aftermarket Overview – Costa RicaRoy Fernandez, Senior Commercial Specialist, U.S. Commercial Service Costa Rica
Trade Mission BenefitsCarolina Arregoces, Associatte International Affairs, Auto Care Association
Q&A
President
Vice President
Cabinet
Industry &
Analysis
Enforcement&
Compliance
Clients
The U.S. Commercial Serviceassists and advocates for U.S. businesses in international markets to foster U.S. economic prosperity.
U.S. COMMERCIAL SERVICE GLOBAL PRESENCE
RSCOs, SCOs, PCOs, HoSPartnership Posts
KEY
Overseas, we’re part of U.S. Embassies and Consulates worldwide; in countries where U.S. business needs us most. 128 International Offices in 75 countries account for 96% of world export markets.
U.S. COMMERCIAL SERVICE DOMESTIC PRESENCE
We have over 100 Export Assistance Offices in the United States.
Virginia OfficesNorthern VA and Richmond
What is the Auto Care Association?
The Auto Care Association has nearly 3,000 member
companies, accounting for approximately 150,000 facilities
and locations that manufacture, distribute and sell motor
vehicle parts, accessories, tools, equipment, materials and
supplies, and perform vehicle service and repair.
Programs & Resources
• Government Affairs / Advocacy
• Education
• Technology / E-Commerce Standards
• Market Intelligence
• Communications Resources
• International Growth / Business Development
Exploring New Markets in Latin America• Award from U.S. Department of Commerce to promote
exports• Successful trade missions in 2016 and 2017:
Guatemala, Peru, Colombia, Honduras and Nicaragua
• More than half of all of America’s FTA partners are in Latin America
• More than 40 % of U.S. exports go to Latin America
• High level of used-car sales and used-vehicle imports
• Aging vehicle population
• Proximity and demand
FTA Benefits• Under the FTA’s with Latin America, most auto parts
enter tariff-free
• Eliminates regulations that restrict international trade
• Strengthens protections for investments and property
• Facilitates and harmonizes customs procedures
• Establishes procedures for resolving disputes
Roy FernandezSenior Commercial SpecialistCosta Rica
Country Overview
Costa Rica Highlights• Democratic Republic
• $57.44 billion GDP (2017)
• Population: 4.81 million
• Literacy rate: 99.1%
• English widely spoken
• Population below poverty line: 22%
• Unemployment Rate: 9.3% (2017)
• Biggest trading partner: United
States
• Biggest investor: United States
Source: Central Intelligence Agency. (2015). The World Factbook: Costa Rica.
Costa Rica:Best Prospects Industries
REGIONAL INTEGRATION AS A MARKET STRATEGY
Automotive Parts and Service Equip.
Renewable Energy
Hotel / Restaurant
Building/Construction
Travel and Tourism
Franchising
GDP per capitaSource: World Bank Report (2016).
Costa Rica Map
Main Airports Main Ports
◦ New APM Terminal Borders
San JoséPort of Limón
Port of Puntarenas
Liberia
Paso Canoas Border
Peñas BlancasBorder Tablillas
Border
New APM MoínPort Terminal
SixaolaBorder
Costa Rica’s Future Projects
Improved Inter-AmericanHighway
New International Airport Orotina
Improved Oil Refinery Atlantic Coast
New Electric Commuter Rail San José
Costa Rican Competitiveness CAFTA-DR Countries Exports to the U.S.
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
2010 2011 2012 2013
Costa Rica
Guatemala
Nicaragua
El Salvador
Rep. Dominicana
Honduras
*Data taken from each country’s Ministry of Foreign Trade, National Statistics Offices or Customs Directorates
Foreign Direct Investment, Net Inflows (CAFTA-DR and Panama) (US $ Thousands)
* Source: Data taken from the latest World Bank report
$0
$1,000,000,000
$2,000,000,000
$3,000,000,000
$4,000,000,000
$5,000,000,000
$6,000,000,000
2010
2011
2012
2013
Challenges• Inefficient government
bureaucracy (highly legalistic)• Quality of the country’s
infrastructure• Financing infrastructure, big-
ticket items• Security tops the list of U.S.
business concerns in CR• #1 in the world for stolen U.S.
passports• Entrenched competitors• Time & “Pura Vida”: Things
take longer than you expect• Challenges in customs, such as
high costs, excessive controls, borders
Opportunities• A strong, strategic partner in
democracy• Well-educated labor force• Transparent institutions (but
not necessarily efficient…)• Business sophistication &
innovation (with a big boost from U.S. companies)
• Good governance standards• Strategic geographic location• Focus on new technologies
(biotech, aerospace, energy)• Greater legal certainty, lower
duties brought about by CAFTA
Costa Rica:A Market of Opportunities
Auto Care Business Opportunities in Costa Rica
CAFTA - DR Free Trade Agreement between the USA, Central America and the Dominican
Republic
Comprehensive, Reciprocal Trade Agreement
80% of U.S. Manufactured Exports Enter Duty-Free to Central America
Low Tariffs (1-17%) for Remaining Products – Certificate of Origin
Improved Business & Investment Climate
Fewer Import Restrictions, Standards Are Similar To The U.S., & Labeling/Testing Greatly Simplified
Competitiveness for US products
Importers prefer US products: quality, durability, proximity, customer service, lower import tariffs, language
Costa Rica
GDP: $57.44 billion, Per Capita: $11.8 thousandInflation rate (2018 est.): 3%.Population: 4,872,516Area: 19,730 sq. Mi
Top Five Productive Areas (from Costa Rica’s Central Bank)
• Tourism• Medical Equipment• Financial Services and Insurance• Agricultural Products
Costa Rica – Automotive Aftermarket Overview
• Total automotive aftermarket imports: $356 million.
• Total Automotive park: 1.6 million.
• Restrictions: Used or retread tires may not be imported into Costa Rica unless they come attached to a rim.
• Standards: Vary. The constitutional court has taken off some of the airbag standards and a new law in Congress plans to lower safety standards.
• Import of cars range between 40,000 and 80,000 per year, 60% are new, 40% are used cars over 8 years old.
• Distribution Channels: New and pre-owned car dealerships.
Costa Rica – Automotive Aftermarket Overview
• AIVEMA: Car show for new vehicles changed the market.
• Tendencies: High quality, durability, availability and an assortment of vehicle parts, and fast delivery are the main factors for increasing U.S. sales of these products.
• Chinese-made products continue to be the second option for the Costa Ricans when importing auto parts.
• New law allows EV’s to be imported with few taxes if under $30,000. No driving or parking restrictions, no payment of driving tax (for five years).
• Autoparts are well needed due to the hard conditions for vehicles, crowded streets, bad traffic.
• Mature marketplace for parts.
Costa Rica – Automotive Aftermarket Overview
• Import and use of motorcycles has doubled in the last decade. Bikes are sold at popular houseware stores.
• Average model in Costa Rica is 16 years old. (2002)
• Internal taxes on vehicles double the original price as compared to the US
• Two brands make up half the sales of vehicles in Costa Rica: Toyota and Hyundai
Used equipment, auto parts are not well received. Even used cars are now sold from the internal market.
Number of importers of cars went down from 150 in 2005 to less than 30 today, and continues to decline, due to new vehicles sales with up to seven years financing available.
Costa Rica - Imports of Auto Parts by Country
29%
14%
13%
11%
5%
5%
4%
4%
3%
3%2% 2%
1% 1%1%
1%1 ESTADOS UNIDOS
2 JAPÓN
3 CHINA
4 MÉXICO
5 COREA
6 Others
7 BRASIL
8 ALEMANIA
9 TAIWAN
10 PANAMÁ
11 ITALIA
12 COLOMBIA
13 TAILANDIA
14 REINO UNIDO
15 FRANCIA
16 ESPAÑA
– Costa Rican Industry Associations
• Asociacion Costarricense de Importadores de Repuestos Automotrices - [email protected]
• Importers of Used Vehicles – CCA [email protected]
• Association of Importers of New Vehicles –AIVEMA [email protected]
Our Services
Gold Key Service International Partner Search International Company Profile International Buyer Program Contact List Business Facilitation Service Export Assistance Centers + 100 Commercial Service + 150
Contact Information
CS Costa Rica –Roy [email protected] - www.export.gov/costarica
CS El Salvador –Sandra [email protected] – www.export.gov/elsalvador
CS Guatemala –Ana [email protected] – www.export.gov/guatemala
CS Honduras –Rossana [email protected] – www.export.gov/honduras
Thank you!
Take the First Step –Participate in a Trade Mission• Business development opportunity supported by the U.S.
Embassy to explore the market
• Successful trade missions in 2016 and 2017
• One-on-one meetings with pre-screened, prospective customers and partners
• Access to key industry contacts, exposure to the local market
• Smaller, automotive specific delegation for customized assistance
Trade Mission to Costa Rica| May. 21-22• Personalized one-on-one meetings through the U.S.
Commercial Service• Country & industry briefing by the U.S. Embassy
• Hotel accommodations, airport transfers and local ground transportation.
• On-site interpreters
• Meals• Conference call with U.S. Embassy specialist to review
specific goals/objectives
Trade Mission to Costa Rica| ItineraryMonday, May 21:
Delegation arrives in San Jose, Costa Rica
Tuesday, May 22:Embassy country & industry briefing Personalized business-to-business meetingsGroup dinner
Wednesday, May 23:Participants return to the United States
Trade Mission | Costs
Cost After Offset
Auto Care Association Members $ 4,100 $ 2,100
Non-Members $ 4,600 $ 2,600
Each Additional Participant Members
$ 500
Each Additional Participant Non-Members
$ 600
MDCP Award Offset* $2,000
Register NowStep 1: Register at www.autocare.org/trade-missions
Step 2: Preliminary feedback from commercial specialists in country
Step 3: Notification on qualification
Step 4: Once payment is received, we will start working on your meetings
DEADLINE: April 6, 2018
Testimonials“Meetings were well planned with the right type of companies that we could potentially do business with. Staff did a fantastic job taking care of all of our needs”
APW Knox-Seeman Warehouse
“For a small company like us, we do not have all the resources to organize a fact-finding mission ourselves. Through Auto Care’s trade mission, the U.S. Embassy requested meetings on our behalf, automatically boosting our credibility as a legitimate company.”
Murray Corporation
“Having the opportunity to meet with the leading companies in the automotive industry has opened a wide range of business venues we were long due to achieve.”
Herko Automotive Group
“The team did a magnificent job of setting up productive meetings with local businesses which are eagerly ready to create business relationships with our U.S. organization.”
Aftermarket Auto Parts Alliance
Questions? Thank you!
Carolina ArregocésAssociate, International Affairs
Kellie HollowaySr. International Trade Specialist
U.S. Commercial Service, U.S. Department of [email protected]
Join Us – Next Webinar
NAFTA Negotiations UpdateImpact on the Auto Care Industry
Tuesday, March 13 at 2 p.m. ET
www.autocare.org/What-We-Do/International/NAFTA/