OTHER SOUTH AMERICA MARKETS

COLOMBIA

Sales: Colombia’s truck market is one of the largest markets outside the Mercosur region. Large
investments in infrastructure allowed the truck market to increase a lot in a few years in the
Colombian market. Due to its topography, the highways are narrow and winds make hard for
long trucks to travel. Main cities have suffered from traffic issues. Mediums have suffered from
restriction laws during rush hours. Colombian Government has enforced strict laws over trucks’
weight in the cities. Besides trucks, the demand for buses has increased after delivery of the
Transmilenio, which is called Bus Rapid Transport (BRT) in Columbia. Other cities are
investing to expand the massive bus transport network and to expand the highway network.
According to the request made by Transmilenio that from Oct’13, all buses used in the massive
transport should be hybrid or electric, it’s a good opportunities for companies that has developed
this technology for BRT, such as Volvo (hybrid buses powered by Electricity/Diesel),
Volkswagen (engines powered by CNG), along with Mercedes-Benz and Scania which offer
trucks for BRT. During 2012 22,001 vehicles were sold, which was an increase of 38.2% from
2011. For 2013, it is expected a slight reduction of 9.5% from that in 2012.

Market share: With a fast increase in Colombia’s market, many companies, mainly Asian
started their operations. Chevrolet is present in the Colombian market since 1991 and started the
production from 1992. Since then, Chevrolet (41.7%) has been the leader of the market, with
trucks robust and reliable, however, the brand has lost market share year-after-year. Asian brands
arrived in the Colombian market a few years ago and they have shown a strong increase in
market share, mainly Foton (3.4%) and Hyundai (2.7%). Foton started its operations in 2012
gained notoriety due to performance. Hyundai arrived a few years ago and has invested in
advertising to improve its brand. Both have imported trucks and they don’t have plans to build
plants in Colombia. Hino (9.6%) produces in Colombia since 2000 and had suffered imported
trucks. For new players, a strategy is low selling prices, till they don’t have a dealer network
developed. Hino decreaser its prices a few months ago trying to gain market share but with
unsatisfying results. Most of the Columbian operators are self-employees and they have started
using Hino or General Motors trucks due to their high capacity of traction while working over-
weight. A few years ago, Colombia Government intensified the weight control of trucks and
buses in the cities.

Questions to the author

1. What is the relation with the restriction laws and the weight of the vehicle? Though it is
indicative that the narrow bridges might be the reason, but it is not clear.
2. What is Transmilenio?
3. Why are Mercedes and Scania offering trucks when the talk is about buses?
4. Why is the demand for electric/hybrid vehicles expected to decrease in 2013 where instead it
would have been expected to increase incrementally as by the request made by Transmilenio?
5. Why is Foton famous for notoriety and has still shown an increase in the market share?
6. What does this sentence mean: ‘Hino (9.6%) produces in Colombia since 2000 and had suffered
imported trucks.’