The International Trade Administration’s Western Hemisphere Team and the Automotive Team will lead an Automotive Parts & Service Equipment Trade Mission to Costa Rica, Guatemala and Panama, June 1-7, 2003. This event will target all sectors of the automotive parts and service equipment industries and will focus on helping those industries expand in these three markets.

In the early 1990’s, Costa Rica experienced a surge in imports of used vehicles as the result of a tax law that favored older vehicles. This surge in imports fueled a corresponding need for auto parts. Though the volume of imports of both new and used automobiles declined during the period 1995-1997, the market for imported auto parts remained strong during that same period. Reflecting a slowing Costa Rican economy, total imports decreased 1.2 percent from 1999 to 2000, to about US$121 million, and decreased to US$120.7 million in 2001, representing a decrease of only 0.3 percent from 2000. The consensus within the local automotive parts industry is that during the period 2001-2004, the sector will grow at an annual rate of 3-5 percent. U.S. market share for automotive parts for the year 2001 was 35.6 percent.

Panama has a population of about 2.8 million and 460,000 vehicles according to the Panamanian Traffic Vehicle Registry. This is the highest per capita car population in Central America. About 70% of the total vehicle population is registered in the Province of Panama. Even with the recent slowdown in the Panamanian economy, there is still a large demand for automotive parts as road conditions deteriorate and the average vehicle age increases. The auto parts market was estimated at $74 million for 2001. Although the downturn in the economy is expected to continue, parts imports are projected to remain stable or grow by 5 percent to $78 million. Over the next three years (2003-2005) market growth should improve to an annual rate of 10-12% with a resurgence of vehicle imports. The market share of U.S. parts imports is estimated at $26 million or 35% with the same growth rate as the overall market.

The Guatemalan market for automotive parts, accessories, and service equipment is expected to grow at a rate of 15% to 20% in 2002 and 2003. Imports from the U.S. enjoy a privileged position in the market and approximately 50% of all automotive parts, accessories and service equipment are imported from the U.S. Approximately 20% of the automotive parts, accessories and service equipment imported into Guatemala are used or reconditioned. Importers of automotive equipment for service stations reported good sales during the past two years and expect similar gains in 2002 and 2003. Equipment is sold to local mechanic shops, service stations and gas stations. The enormous increase in the number of used vehicles from the U.S. has stimulated the need for this kind of equipment. Some 95% of used vehicles are purchased directly from salvaged car auctions in the U.S. and repaired in Guatemala. It has only been a couple of years since Guatemalans started importing used U.S. cars. Brands such as Geo, Chevrolet and Ford (especially trucks), Jeep and others have been most visible in the market. As a result, more parts stores handling U.S. brands are expected to open in the near future.

Mission Scenario:

The Trade Mission members will conduct one day of business meetings in Panama on Monday, June 2. On Tuesday, June 3, participants will travel to San Jose and will meet with their pre-scheduled appointments in Costa Rica on Wednesday, June 4. The mission will then travel to Guatemala City on Thursday, June 5, and have one full day of appointments there on Friday, June 6. At each stop, the Commercial Service posts will provide an extensive market briefing, highlighting opportunities in the automotive parts and service equipment and schedule one-on-one appointments with potential business partners for each participant.

Sun., June 1: Members depart the U.S. and travel to first mission stop–Panama

Mon., June 2: One-on-one business appointments in Panama

Tues., June 3: Travel to San Jose, Costa Rica

Wed., June 4: One-on-one business appointments in Costa Rica

Thurs., June 5: Travel to Guatemala City

Fri., June 6: One-on-one business appointments in Guatemala

Sat., June 7: Return to U.S.

The Trade Mission will be promoted through the following venues: the U.S. Export Assistance Centers and Teams; Federal Register; relevant trade publications; relevant trade events (Automotive Show – Las Vegas, November 2002) relevant trade associations; various in-house and purchased industry lists, and on ITA's Internet home page. Trade Development (TD) and Export Promotion Services (EPS) will assist the teams in promoting this event.

The Trade Mission’s goal is to gain first-hand market information and provide access to key government officials and potential business partners for new-to-market, and/or new-to-export U.S. automotive parts and service companies in Central America.

• Relevance of the company's business line to mission goals.
• Potential for business in the selected markets.
• Timely submission of the company's completed application, participation agreement, and payment of the mission participation fee.
• Provision of adequate information on the company's products and/or services and communication of the company's primary objectives to facilitate appropriate matching with potential business partners.
• Certification that the company's products and/or services are manufactured or produced in the United States, or, if manufactured/produced outside of the United States, the product/service must be marketed under the name of a U.S. firm and have U.S. content representing at least 51 percent of the value of the finished good or service.

Any partisan political activities of an applicant, including political contributions, will be entirely irrelevant to the selection process.

Recruitment will begin immediately, and will close on April 18, 2003, approximately six weeks prior to the start of the mission. The Mission will target 10-15 companies. Applications received after that date will be considered only if space and scheduling constraints permit.

The participation fee for the event will be $1,800 per company.

Jayne Woodward, Chairperson

Central America & Caribbean Working Group
Western Hemisphere Team
Columbia U.S. Export Assistance Center
1201 Main Street, Suite 1720
Columbia, SC 2901
Tel: (803) 253-3612
Fax: (803) 253-3614
Email: jayne.woodward@mail.doc.gov

Ruth Mayo, Team Leader

Automotive Team
Pontiac U.S. Export Assistance Center
250 Elizabeth Road, Suite 1300 W
Pontiac, MI 48341
Tel: (248) 975-9602
Fax: (248) 975-9606
Email: ruth.mayo@mail.doc.gov