Overview

Local production of auto parts in Costa Rica is limited to small electrical and metal parts, batteries, electrical copper cable, hydraulic seals, filters (air/gasoline), steel leaf springs, aluminum and steel wheels, windshields, carpets, hoses, mufflers, bus bodies, seat covers and tires.  Major U.S. competitors in this sector are from China, Japan, Mexico, and South Korea.  The auto parts supply from China has continued to grow over the last three years and in 2020, China took the number one spot from U.S. suppliers. 

Overall, it should be noted that total imports in this sector steadily increased from $401 Million during 2022 to $470 Million in 2023 and a total of $545 Million in 2024. Most people keep their vehicles for a number of years, as the internal tax system for new vehicles is as high as 50% of the value of overseas vehicles. The median age of a car in Costa Rica is 18 years old.  The new trend, due to the government incentives of lower taxes to buy new vehicles, Costa Rica has now 15.4% of its fleet are electric vehicles (EVs).  Even though Costa Rica is the perfect market for auto parts, due to its poor road infrastructure, crowded streets, and lots of wear and tear due to unending traffic, the market is also mature and offers all types of brands, and a range of products varying in quality and services.  It is important to take into consideration that the Costa Rican market is mostly a price-driven market, but there is always a niche for high-value parts from the United States.

The surge on the imports of used low-cost vehicles from South Korea and China during the last few decades led to a growing increase in auto parts imports directly from Asia or through a distributor in the United States. However, with current market conditions, long shipping times from Asia and unreliable quality controls, Costa Rican customers have begun to come back to purchasing parts from the United States and more reliable neighboring countries. 

Leading Sub-sectors    

The number of cars in Costa Rica has more than doubled since 2010 with more than 1.8 million registered vehicles in country.  Of those vehicles, 65 percent are automotive vehicles, 33 percent are motorcycles, and 1.5 percent are buses with the average age of a Costa Rican vehicle at about 18-years old. During 2023, about 10% of imported vehicles were electric vehicles and of those about 80% came from China.

Used Vehicles

Some of the cars on Costa Rican roads are imported as used from the United States and have extras that are not standard in new cars found in Costa Rica and come with a lower price tag. This trend is decreasing due to the improved promotion of new vehicles and better support from the local banking system with financing for new cars.  The automobile 10-day fair, Expo Auto, organized by the Chamber of New Car Importers (AIVEMA), has been very successful in past years by helping new car dealers do more business in one place.

In 2019, the government passed a regulation that requires the checking of every used vehicle’s VIN to track all cars imported into the country and ensure companies are complying with the law that states if a vehicle was used as a police car or rental car, it cannot be imported into Costa Rica. The Association of Importers of Used Vehicles (CCA) as well as other two Chambers of Used Vehicles (ACAAU Y AEPSAU) have challenged this regulation as it is not only stopping the imports of totaled cars but many other categories of titles that do not cause any danger to Costa Rican users. In addition, this regulation only negatively impacts used vehicles from the United States that have a valid VIN registration system. Vehicles from other countries without such a system are not subject to additional scrutiny.  

Costa Rican importers of automotive accessories mainly purchase their products in the United States, although a growing portion of these items are coming from non-U.S. sources. According to several Costa Rican importers of automotive parts, good sales opportunities exist for virtually all categories of products in this sector. High quality, durability, availability and an assortment of vehicle parts, and fast delivery are the main factors for successful sales of U.S.-sourced products. Chinese-made products are the low-end option for the Costa Ricans when importing auto parts.

Electric Vehicles and Chargers

Costa Rica is the first Latin American country to sign a law incentivizing the purchase of EVs. In 2018, former Costa Rican President Solis signed a law to promote the adoption of EVs through tax breaks and other incentives. The Ministry of Environment and Energy (MINAE) promulgated the regulations to implement the law.  In 2022, the legislature approved, and then- President Alvarado signed an extension of incentives for another 12 years. Currently, out of the roughly 1.2 million automobiles in Costa Rica, only 1,200 are 100 percent electric. The government projects that this number will grow because of the law’s incentives, and that by 2035 Costa Rica will have over 100,000 electric cars on the streets.

The new law establishes many incentives for the purchase of EVs such as waving the taxes and duties for imported EVs based on the value of the vehicle.  The exemptions will be applied on a progressive basis, such that a vehicle that costs $40,000 will get the full exemption for the first $30,000 and the intermediate exemption on the remaining $10,000.  Press reports estimate that EV buyers could save between $5,000 and $10,000 based on these incentives. Beyond the initial tax benefits, EV owners will also benefit from tax exemptions for replacement parts, free parking at public parking meters, and these vehicles will not be subject to driving restrictions to reduce traffic. Any companies that decide to manufacture EVs in Costa Rica will be able to import assembly and production equipment tax free.  

Currently, new or used EVs circulating in Costa Rica include the following brands:  Aion, Airways, Audi, BMW, BYD, Chery, Chevrolet, Dulevo, DFSK, FAW, Fiat, Ford, KIA, Letin, Levdeo, Great Wall, Hyundai, JAC, Jaguar, MG, Maxus, Mitsubishi, Nissan, Renault, Reva, Smart, Tesla, Volkswagen, Wuling, Yema, Xpeng, Yudo, and ZD.  

According to the Costa Rican Electric Mobility Association (ASOMOVE), there are 125 charging stations in the country.   In 2025, the state-owned provider Costa Rican Electricity Institute (ICE) plans to install 230 new charging stations, including 30 fast chargers and 200 semi-fast (21 kW) chargers.  An additional 14 new charging stations, each with at least three fast chargers, are also planned for installation by ICE and are expected to be completed in the first half of 2026.  
It is important for the U.S. parts market to follow this trend in Costa Rica, as electric vehicles have an average of 200 parts, while combustion engine vehicles have over 1,000 parts.

Opportunities

Since the ratification of CAFTA-DR, U.S. suppliers are now well positioned to expand their market share for automotive parts. CAFTA-DR better positions U.S. exporters to take advantage of this expanding market.  Import taxes for automotive parts before CAFTA ranged from zero to 29.95 percent, depending on the product. Most of these import taxes disappeared immediately with CAFTA-DR approval for auto parts; others were gradually reduced to zero import taxes over a period of 10 years. Imports of vehicles continue to be highly taxed domestically in Costa Rica. Opportunities are opening in other areas such as electric vehicle chargers, replacement batteries, and servicing for electric vehicles.