Panama has about 300,000 vehicles with 1997 sales of around 20,000 units, with a market share by the Japanese of 50%. There is no local production. Total imports of automotive products are $145 million ($25 million from the United States).

Costa Rica's imports of automotive parts reached $97 million in 1997, primarily from the U.S. The import business is composed primarily of previously driven vehicles, and not necessarily from the U.S. The total market for 1998 reached $110 million. Local production is only $38 million in parts while exports are $35 million. Imports total $115 million ($51 million form the U.S.).

Auto Parts/Service in 1998 ($ Millions)

Country Market size Total imports Imports from the USA Mexico 10,587 5011 n/a Argentina 4790 2970 245 Colombia 1294 966 353 Costa Rica 110 106 47 Guatemala 79 59 33 Honduras 77 77 36 Panama 60 60 21 Trinidad 21 20 6

Guatemala has about 600,000 vehicles; its 1999 market is estimated at $93 million. Local production of automotive parts reached $23 million and exports $1 million. Imports reached $71 million ($44 million from the U.S.).

The Dominican Republic is experiencing a currency risk problem. Its current account deficit began to deteriorate even before Hurricane George hit in September 1998.

Honduras has an aging vehicle population and the high rate of previously driven vehicle imports sustains a strong parts replacment market. Honduras' 1999 market size is $85 million, with no local production. Imports are $85 million. Imports of automotive parts from the United States reached 39.4 million in 1998.

Nicaragua's overall risk factors reflecting conditions in currency, national debt, and banking were all negatively affected by Hurricane Mitch in October 1998. The risk factors will stay high for the remainder of 1999.

Trinidad uses right-hand drive. The country's market size reached $21 million. Exports reached $1 million while imports hit $20 million.

Paraguay's new government has put together a good economic plan that will reflect a positive debt reduction program for the future. It has improved its investment risk categories while better positioning itself externally. The banking sector has also gone through some updating through mergers, closure, compensation for depositors against crisis, and encouragement of competition, and a transparent approach in the financial sector.

Bolivia's economy also has experienced deterioration and has a very large current account deficit. An increase in exports to correct its economy does not look encouraging in the immediate future.

The Uruguayan motor industry had six manufacturers building several models including passenger cars, light commercial vehicles, and trucks. The total fleet is about 450,000 units. With 3.2 million people, the vehicle ownership rate is highest among Latin American countries.

At one time Uruguay was labeled the Switzerland of South America. However, the automotive industry has declined in Uruguay due to imports from neighboring countries. Uruguay 1998 vehicle production for passenger cars was 5000 and the forecast for year 2000 is 7000 units. Light commercial vehicle production for 1998 was 1000 and forecast to reach 3000 in 2000.

Uruguay vehicle sales for passenger cars and light commercial vehicles in 1998 totaled 33,000 units, heavy commercial vehicles 2000 units. Year 2000 forecasts are 36,000 passenger cars/light vehicles. Heavy commercial vehicle sales are expected to remain steady.

Transparency International's Corruption Perceptions Index, covering 85 countries, delivers generally poor marks for Latin and South America. Paraguay ranks next to last.

Corruption Perceptions Index, Latin America, including Mexico:

Country Index Chile 20 Costa Rica 27 Peru 41 Brazil 46 Jamaica 49 El Salvador 51 Mexico 55 Guatemala 59 Argentina 61 Nicaragua 61 Bolivia 69 Ecuador 77 Venezuela 77 Colombia 79 Honduras 83 Paraguay 84

The 1999 Index of Economic Freedom is a Heritage Foundation/Wall Street Journal measure of 161 countries' economic freedom based on 50 criteria). The higher the score the greater the level of government interference in the economy—and less economic freedom.

Free Mostly Free Mostly Unfree Repressed Not Ranked   1.00-1.99 2.00-2.99 3.00-3.99 4.00-5.00

Argentina 2.50, Bahamas 2.00, Barbados 2.60, Belize 2.80, Bolivia 2.65, Brazil 3.25, Chile 2.15, Colombia 3.10, Costa Rica 2.80, Cuba 5, Dominican Republic 33.5, Ecuador 2.95, El Salvador 2.25, Guatemala 2.75, Guyana 3.50, Haiti 4.00, Honduras 3.15, Jamaica 2.70, Nicaragua 3.50, Panama 2.40, Paraguay 3.05, Peru 2.60, Suriname 3.85, Trinidad and Tobago 2.55, Uruguay 2.70, Venezuela 3.40 and Mexico 3.15.

Many countries in South America are in a trading association. Among the associations:

• Sica (Central American Economic Integration System) includes Guatemala, El Salvador, Costa Rica, Honduras, and Nicaragua, with a total 1996 GDP of $41 billion.
• Caricom (Caribbean Community) includes Antigua, Barbuda, Bahamas, Barbados, Belize, Dominica, Grenada, Guyana, Jamaica, Montserrat, St. Kitts, Nevis, St. Lucia, St. Vincent, Grenadines, Trinidad, and Tobago, with a total 1996 GDP of $15 billion.
• Mercosur (The common Market of the South) includes Brazil, Argentina, Uruguay, and Paraguay, with a total 1996 GDP of $1.1 trillion.
• The Andean Community includes Colombia, Venezuela, Peru, Ecuador, and Bolivia, with a total 1996 GDP of $239 billion.

All of the trading areas are developing free market systems, and the countries that are doing quite well include Chile, with a 1996 GDP of $74 billion, and Peru, with a 1996 GDP of $61 billion. Countries such as Venezuela, Ecuador, and Uruguay seem to be destined for high inflation, political instability, and debt.

Latin America's motor industry had a total fleet of 25 million vehicles in 1997—Brazil and Argentina representing 80% of that total. The figure is expected to reach 34 million by 2005.

Latin American production of passenger cars in 1990 totalled 1.95 million units, 10% below 1980's record of 2.18 million.

South America's 1997 GDP was $1.9 trillion and a total population of 403 million. In this same area the automobile industry in 1998 had sales of 2.7 million units. Brazil, Mexico, and Argentina account for 95% of the total Latin American production.

Latin American Automotive Industry Overview

Country Production Sales Fleet Brazil 1.7 million 1.5 million 13.3 million Mexico 1.4 million 537,000 12.4 million Argentina 328,000 318,000 5.1 million Colombia 46,000 71,000 2.2 million Venezuela 163,000 180,000 1.9 million Chile 21,000 80,000 2.0 million Uruguay 6,000 35,000 500,000 Other Remaining 0 0 13 million Total 3.66 million 2.72 million 50.4 million

Country profiles were provided by Raymond Champagne