Impact of Political and Economic Stabilisation on the Development of the Automotive Industry and Motorisation in Colombia at the Beginning of the 21st Century

Abstract

As early as in 2000, Colombia was considered a highly politically unstable country in which a long-standing armed conflict between the army and various guerrilla groups and drug traffickers had been going on for a long time. These conditions hampered economic development, limited the development of industry and negatively affected consumer behaviour of inhabitants. The peace talks initiated at the beginning of the 21st century led to a gradual stabilisation of the internal situation in the country, which became an impulse for accelerating economic development and improving consumer moods. The automotive industry was one of those sectors of the economy that gained a strong development impulse. This was reflected in the increase in employment and production of new cars, which in the period 2000-2017 increased significantly. The sales of new cars grew even more dynamically which was associated with an increase in imports and a deterioration in the trade balance of this sector. The main objective of this study is to determine the impact of political stability and the associated improvement in the economic situation in Colombia on the development of the car industry driven by the growth in sales of new vehicles. Efforts were also made to determine the impact of the level of economic development and road infrastructure on the regional diversification of sales of new cars.