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Colombia Car Sales Down 24% In June To 16,125 Vehicles
14 hours ago

BOGOTA (Dow Jones)--Colombian motor vehicle sales at the wholesale level fell 24% in June to 16,125 units compared with the same month in 2007, according to data released by the industry group Comite Automotor Thursday.

Vehicle sales fell 11% to 110,005 units in the first half of the year from the same period in 2007, when 123,386 vehicles were sold.

In January, monthly sales fell 6.3% compared with the same month in 2007, the first decrease recorded since November 2003. Meanwhile in February, vehicle sales fell 3% on-year, while in March they retreated 14%.

"Like many sectors in the economy that are decelerating, sales of cars have also been hit by high interest rates," Daniel Escobar, head of research at local brokerage Gesvalores, said.

The most recent figures show that monetary tightening is already cooling down the Colombian economy. Colombia's gross domestic product expanded 4.1% in the first quarter of this year from a year earlier. During the first quarter of 2007 GDP grew 9.1% year over year.

The central bank has gradually raised its key rate to 9.75% from 6% in April 2006 in a bid to stop inflationary pressures.

In 2005, 2006 and 2007, car sales rose at a pace faster than 25% as a strong peso and lower interest rates encouraged people to buy vehicles. Colombian car sales at the wholesale level reached a record high of 258,443 units last year.

General Motors Corp. (GM) topped the sales rankings in June with 5,404 units, down from 7,601 in June 2007.

French car maker Renault (13190.FR) took the No. 2 spot, with 1,722 units in June, down from 3,375 units in the same month last year.

Korean Hyundai Motor Co. (005380.SE) sold 1,953 cars in June, down from 2,546 vehicles in the same month last year.

Comite Automotor's statistics cover more than 90% of the vehicles sold in Colombia, including buses, private vehicles, taxis and trucks.

-By Diana Delgado, Dow Jones Newswires; 571-6955450; [e-mail]

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