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Global Country Report on Columbia P R O D U Handicraft/ToningC T InfrastructureRestaurantOneAgriculture Many Few TradeVillageExporters LocationsAlgarra ParmalatLocationsAlpinaLowColanta OneHigh Hotela Product R A Global CountryN G ReportE On Columbia Submitted by: Manish Institute Of Management Visnagar PEST Analysis Political: - Factors are how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability. Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bads). Furthermore, governments have great influence on the health, education, and infrastructure of a nation. Economic:- Factors include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy Social: - Factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates. For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labor). Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older workers). Technological: - Factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. Furthermore, technological shifts can affect costs, quality, and lead to innovation. Environmental: - Factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of the potential impacts of climate change is affecting how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones. Legal: - Factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products. Chapter 1 Automobile Industry EXECUTIVE SUMMARY The project titled, “GLOBAL COUNTRY REPORT” is being carried out for REPUBLIC OF COLUMBIA. Columbia Report has been given more emphasis for the study of the project where all type of Age group, Geography, Government, Economy, Defense, Education, Language, Income class and different level of people are represented. After analyzing the feedback the conclusion has been made that the Republic Columbia Report is having lots of different type of information about Columbia. Colombia is the ideal stage to generate a platform for the manufacturing and assembly of cars, trucks, buses and auto parts destined to supply the local and regional markets. The automotive industry represents 6.2% of GDP, employs close to 2.5% of the occupied population and places Colombia as the fifth automobile manufacturer in Latin America. “Although Colombia is still one of the markets with the lowest amount of new cars in Latin America, its potential compared with the large population, is very promising”. Jose Valls, Vice President, General Motors Colombia The automotive sector is the fourth most important industry in Colombia. The United States has traditionally been Colombia’s major supplier of vehicles, automotive parts and accessories. This sector represented 8% of all Colombian imports for the first semester of 2009. Colombia imported from the United States $11.3 billion products in 2008. After a sustained growth of 20% per year since 2001, the Colombian automotive sector has experienced a significant setback in 2008. According to the Colombian Ministry of Commerce, Industry and Tourism, total sales of this sector (local market and exports) dropped by 41% with a 40% drop for utility vehicles and trucks. Domestic demand reduction and restrictions on Colombian exports to Venezuela and Equator were the major factors. In 2008, the Colombian local market experienced a 15% overall reduction. The Colombian ministry of transportation imposed a reduction on truck licensing and a program to discard trucks over 20 years old until 2010. The output of this sector in the national industry lost 5%, from 41.5% in 2007 to 40% in 2008. A significant factor was Venezuelan restrictions on imports from Colombia, reducing national exports to Venezuela by 64%, which greatly affected the Colombian automotive industrial production and national employment rate. In 2009, it was projected that sales of imported of vehicles would drop by 18% from 2008, from 139,554 units sold in 2008 to 114,480 units in 2009. During the first quarter of 2009, the market remained stagnant, only tackling large dealer inventories. The automotive sector is gaining pace and reacting more dynamically in the second quarter of 2009, boosted by new production and assembly lines and a stronger demand for auto parts. The Colombian automotive industry represents 6.2% of GDP and employs 2.5% of the occupied personnel within the manufacturing industry, making Colombia the fifth automotive manufacturer in Latin America. In Colombia, this industry gathers activities such as assembly (light vehicles, trucks, buses and motorcycles) and the manufacturing of parts and fittings used in the OEM assembly or after-market. As for spare parts, it involves raw material suppliers from other industries such as metal mechanic, petrochemical (plastic and rubber), and textiles. The Colombian automotive industry counts with close to 5 million automotive units, it also holds commercial agreements that provide it with preferential access to a regional automotive market of 34 million vehicles (Mexico, 28 million, Chile, 3 million, Peru, 1.5 million and Ecuador, 1.1 million). The auto parts sector has been identified as one of the 8 sectors that make part of the Productive Transformation Program in Colombia; this initiative goal is that by 2032 Colombia will be recognized as a leader export country in the auto parts sector, generating revenues of US$ 10 billion and positioned as a regional leader in specific segments. In pest analysis the political factors include areas such as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability. Factors include economic growth, interest rates, exchange rates and the inflation rate. Factors include the cultural aspects and include health consciousness, population growth rate, age distribution, career attitudes and emphasis on safety. Factors include technological aspects such as R&D activity, automation, technology incentives and the rate of technological change. Factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. An opportunity to find employment with other state agencies while the agency is considering if internal placement options are available. Preference to other classified vacancies in Executive Branch agencies that are in the same or lower Pay Band as their current positions and for which they are minimally qualified; and preference over any external applicant that applies for the position. SWOT ANAYSIS Strength Colombia Automobiles Report shows an industry that continues to go from strength to strength. During 2006, the sector has enjoyed bumper sales on the back of a healthy economy and strong consumer demand. Industry majors such as General Motors have identified Colombia's potential as a strong production hub and moved to step up activities in the country. The sharp upswing in sales figures led BMI to raise its 2006 forecast to 180,000 units in the last quarter. We reiterate this figure for the final phase of the year, and maintain our production forecast of 40,211 units. Weakness Colombia's car industry hit something of a milestone in October when sales surpassed the 20,000 unit-mark for the first time ever. Sales for the month totaled 21,407 units, thanks to the motor show that took place in the capital Bogotá. According to industry sources, the motor show enjoyed record levels of attendance, while some 7,000 deals were wrapped up. In fact, Bogotá's motor show goes some way to explaining why we have restated our forecast for the remainder of 2006. Given the widely held view that the motor show was behind the strong upturn reported in October, we expect to see sales fall off during the remainder of the year, with the figures for October representing an albeit welcome blip. According to data from the analysis group Econometría, car sales in October were 7.8% higher than in September. General Motors topped the list of best sellers with its Chevrolet model, selling 7,859 units. The US giant was followed by Renault (3,597 units), Hyundai (2,402 units), Mazda (1,152 units) and Toyota (984 units). Subaru reported a huge month-on- month increase of 166%. Opportunities It believes the health of the Colombian
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