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Automotive Parts & Service Equipment
A Top Export Prospect for Panama

May 2013

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Market Estimates

(in US$ millions)

2011

2012

2012est

2014est

Total Market Size

148.0

163.0

179.0

197.0

Total Local Production

0.0

0.0

0.0

0.0

Total Exports

0.0

0.0

0.0

0.0

Total Imports

148.0

163.0

179.0

197.0

Imports from the U.S.

62

70

77

84

The above statistics are unofficial estimates.

Overview

The market for new automobiles showed substantial recovery in 2012, after a significant decline in the last previous years. Approximately 50,000 new cars were sold in 2012. As a result, demand for automotive parts and service equipment has increased. The automotive inventory in Panama is estimated to be 1,000,000 units. U.S. participation in the automotive parts and service market is significant, with a market share of more than 40%. The main competitors are Japan, Korea, and Taiwan. However, the U.S. market position will improve as sales of U.S. cars increase. Demand will also remain strong for U.S.-made car parts and accessories for Japanese models.

It is important to note that cars are not subject to import duties, regardless of national content of origin. They are, however, subject to a progressive sales tax based on the value of the car. The recently implemented U.S. – Panama Trade Promotion Agreement (TPA) does not, therefore, give a competitive advantage to U.S.-made cars. But the TPA does give an advantage to U.S.-made automotive parts, which can enter duty-free. There are no import restrictions on these products. Sub-sectors offering the best market opportunities are servicing equipment, tubes and tires, and engine parts.

Sub-Sector Best Prospects

Good prospects for U.S. exports include engine parts, pumps, filters, batteries, ignition parts, spark plugs, lamps, body parts, brake parts, shock absorbers, tires, exhaust components, and used or remanufactured parts especially for buses, dump trucks, and other commercial vehicles.

Opportunities

Panama is experiencing a construction boom, with approximately $15 billion in outstanding public sector projects alone, in addition to the Panama Canal expansion project and a number of private commercial and residential developments. This activity will bring excellent opportunities for U.S. exporters of auto and truck parts. In 2012 the Government of Panama completed replacement of the entire bus fleet serving Panama City and continues to impose greater regulations on car inspections, which has the resulting effect of greater demand for automotive parts.

Web Resources

For More Information

The U.S. Commercial Service in Panama can be contacted via e-mail at: jeane.zuniga@trade.gov;

Phone: 011-507-317-5392; or visit our website: http://www.export.gov/panama.