1. Import Process for BMW tires from Perú
Presented by: Juan Sebastián Betancur
Juan David Cálad
Laura Victoria Díaz
Juan Pablo Henao
Presented to: Juan Alejandro Vásquez Ruiz
Catholic University of Pereira
Faculty of Administration and Economics Sciences
International Business Program
International Logistics Administration
2011- 02

2. Introduction
The financial crisis seems don’t affect the automobile sector, on the contrary every time we
find many models with different features in the market. According to the Colombian
magazine Dinero 2001, the growing supply of vehicles in Colombia, is due to the financing
and business strategies of different brands and it suggests that 2011 will be one of the
best years for the sector. This market is characterized by dynamism, not only for the entry
of new competitors into the market but for the increase of the demand of automobiles and
the different prices. At the same time this means that every year more cars are
depreciated having a lower price and this fact is decisive for possible Colombian buyers.
Both Colombia and Chile are the largest buyers’ countries of vehicles in South America,
after Argentina and Brazil.
BMW is one of brands already established in Colombia with a good position in the market.
The representative of BMW in Argentina, Alejandro Echagaray declares that the results of
the company in Latin America are very positive, so much that today the brand is a leader
in the region. He also affirmed that the BMW Group's success is based on a long-term
vision and a responsible action. So much that for the seventh consecutive year BMW
Group is the most sustainable automobile company all around the world, and has been
designated as a leader of industry classification for SAM Group in Dow Jones
Sustainability Indexes (DJSI). (BMW Colombia, 2011)
The official site of BMW Group for Colombia states that the brand has a wide range of
products and this will make this year the company sold 1.6 million automobiles in the
country. So that if Colombian people have BMW automobiles they are probably going to
need tires for them after a determined time and they will want definitively to buy their tires
designed by BMW automobiles and not another type of tires. Is why today there are many
enterprises and distribution centres that buy tires from a different country and them they
sold them in Colombia, directly to automobiles’ owners as well as the import enterprises of
vehicles.
Audi and Mercedes-Benz are the two mainly competitors of BMW because both of them
make sport and luxury as make BMW. So the clients are clearly part of high class people
and the challenge is to convince them with elegance, sophistication and quality. In 2010,
directives from this tree brands agreed with the positive result and success of the sales of
automobiles of high game. In this year, Audi sold 1.244 units, Mercedes-Benz 1.078 and

3. BMW 1.899. Despite the important growth of Audi in the Colombian market, BMW
maintains its leadership with the largest among of units sold. (Revista Summa, 2011)
Our objective consists of importing tires from Goodyear Perú for BMW serie 3 to our own
distribution centre called Distribuciones Chika, which has a warehouse in Bogotá Free
Trade Zone and from there every product is distributed to the rest of Colombia. We buy
mainly tires for BMW serie 3 because in Colombia this is the reference more common. We
will import 4 containers 20’ each one with 480 tires, it means a total of 1920 of tires of a
specific reference of BMW per month and then we distribute to the authorized importer of
BMW in Colombia, Autogermana, which has presence in differents cities of the country:
Barranquilla, Cúcuta, Bogotá, Bucaramanga, Pereira, Medellín and Cali. In this case we
are going to develop the import process of tires from Perú and the distribution of 100 tires
for BMW serie 318 i to Autogermana in the city of Pereira.
The tire’s name is Eagle F1 Asymmetric, which is unique in the Colombian market and is
used for luxury cars. We chose to import the tires from the Peruvian market because after
doing an analysis of the market of tires we conclude that the cost of this good in Perú is
inferior to the domestic market and the import makes positive profits.
The importance of the Peruvian market to Colombia is paramounth because the two
countries are part of the free trade agreement CAN (Comunidad Andina de Naciones),
Andean Community in english, which the products can be exchanged with great facilities,
free of taxes and a wider market area. In the other hand, geographically Perú is close to
Colombia, so this is an advantage for the logistics process because the route is shorter
compared to other countries that are not adjacent to Colombia. Therefore, the import time
is shorter, because orders can arrive in less than a week, in case of a customer to place
orders before the import process the merchandise will be delivered in less than a week.
CAN was signed in 1969 between Ecuador, Bolivia, Perú and Colombia and the main
objectives are the cooperation, development and economic growth to the members. It
intends to move forward in the deepening of integration that effectively contribute to
sustainable human development and equitable to live well.
The Decision 414 of the CAN, where Peru took a tariff elimination for imports and exports
from the members countries of Comunidad Andina de Naciones, where the process was
obtained as required 8 different tariff reductions, which refers to a shielded number of

4. products, which means a reduction of tariffs. Today is a 100% tariff reduction for the CAN
members.
Our product specifically is made with rubber material so the costs of tariffs and taxes are
zero, which is quite positive in terms of utility for us and also if we want to offer a good
price for our clients.
The following table shows the competitiveness of Peru according to La Cámara de
Comercio de Bogotá:
COMPETITIVENESS
Economic Performance competitiveness
• 1st place in Latin America • 2nd place in Latin America
• 14 global position • 35 position globally
Business Efficiency Government Efficiency
• 3rd place in Latin America • 2nd place in Latin America
• 30 global position • 32 position globally
In the other hand, the important index of the World Bank, Doing Business by 2011 shows
that Peru is the second best country in Latin America to do business, and is the third one
in the Latin Business Index. "Peru is in third place because it has the best macroeconomic
environment in Latin America, besides being the fourth best in the corporate environment

5. and technological level. It is also one of only two countries improved their index score
compared to 2008”. (GESTIÓN, Diario de Economía y Negocios del Perú, 2011)
Also it’s relevant to add the the main destinations for Peruvian exports tires are Colombia
and Ecuador, which together account for 55 percent of the total in 2010, reported La
Asociación de Exportadores del Perú, ADEX.
The main exporting companies of Perú are Goodyear del Peru, Laminates, Megacaucho y
TDerivados, Michellin and Perú, among others. (Exportaciones del Perú, 2011) The
supplier company of tires for BMW automobiles is Goodyear del Perú. It is ubicated in the
city of Callao in Perú.
 Logistic Process
Size of the tire: 225/45R17 94Y XL - 2007
Weight: 23 lbs
Total weight for each container: 11040 lbs.
The 480 tires will compiled in packs of four tires.
Pack
52” = 4.3 feet
28” = 2.3 feet
Weight of the pack: 6 lbs
Total weight: 11046 lbs
Container 20” (19’4”long x 7’9” width x 7’10” height)
The tires will be packed like shown in the picture above, with the size of the
container being 19’4” long we can accommodate 4 “packs” long and 3 up, giving us
a total of 48 tires in a single row. The width of the container let us accommodate up

6. to 10 rows of tires (width of tire 8.9” and with of container is 93”). So in a container
of 20’ we can have 480 tires.
 Location of the company in Colombia: Distribuidora Chika and is installed in
ZONA FRANCA BOGOTÁ, S.A. Cra 106 No. 15A-25 Casillero 3 Fontibon Bogotá
D.C., Colombia
 Location of the company in Colombia in Perú: Goodyear Av. Argentina 6037,
Carmen de la Leyva, Callao, Perú.
 Route:
-Puerto del Callao (city of Callao - Perú) – Puerto de Buenaventura (city of
Buenaventura –Colombia)
-Puerto de Buenaventura (city of Buenaventura – Colombia) – Distribuciones Chika
(Zona Franca Bogota Cra 106 No. 15A-25 Casillero 3 Fontibon)
- Distribuciones Chika (Zona Franca Bogota Cra 106 No. 15A-25 Casillero 3
Fontibon) – AutoGermana (city of Pereira; Avenida Circunvalar # 13-40 Centro
comercial Uniplex L. 10)
 Total Amount of Imported Tires : 1920 units
 INCOTERM: DDU (Delivered Duty Unpaid)
This incoterm refers that Goodyear del Perú hire the logistics and insurance
company to transport the tires from Perú to Colombia’s Port more specifically to
Buenaventura’s customs. After the merchandise arrives and cross the border
Distribuciones Chika has the responsibility.
 International Logistics Company: MAERKS S.A
The Transport from the Callo’s Port to Buenaventura’s Port is going to be maritime and the
trajectory is going to be direct. For that MAERKS S.A was the company chosen between
the export and us for transporting the tires. It’s a serious company that is consistently
recognized as one the most reliable container shipping company in the world.

7. From Buenaventura to our distribution centre in Bogotá and from Bogotá to Pereira the
transport of the tires is going to be by ground.
It is necessary to say that the added values that the transport enterprises have are the
weather. Colombia has different kind of weather and it directly affects the movement of the
merchandise. In the other hand, most of the drivers of the trucks normally stop in the road
to take a feed, we are taking it into account because of the time required and some costs.
 COSTS
Cost USD Total
GoodYear Factory to Callao’s Port: 4 4 USD
Transport (Gasoline 8km)
From Callao’s Port To Buenaventura’s 1.200 1200 USD
Port
From Buenaventura’s Port to 250 250 USD
Distribuciones Chika Bogotá:
Transport (Gasoline 533km)
Distribuciones Chika Bogota to 140 140 USD
Pereira: Transport (Gasoline 290km)
Unpackers Bogota and Pereira
10 40 USD
Total: 1634 USD
 Prices
Price of purchase from Perú for each tire: 189 USD
Total sum (1920 tires): 362.880 USD
Price of sale in Colombia for each tire: 436,17 USD
Total sum (1920 tires): 837446,4 USD
Profit: 474566,4 USD

8.  Estimated time
From the factory Goodyear Argentina Avenue 6037 to the port of Callao is
8.6 Km away and the average of time is 18 minutes.
Then, the merchandise is discharged in the port and the average of this
operation is one day.
The next step is the Port of Callao, Perú - Port of Buenaventura, Colombia
 Distance: 1.126 Nautic Miles (2.083 km). There is two days to the time of the
transport.

9. After that, the merchandise applies the customs requirements as the DIAN form (import
declaration) and the legal paper form to legalize and nationalize the merchandise in
Colombia. After that the tires will be collected to the Free Trade Zone of Bogotá in a truck.
The merchandise will be transported in two trucks each one with 2 containers to
Distribuciones Chika (Zona Franca Bogota Cra 106 No. 15A-25 Casillero 3 Fontibon)
(Buenaventura – Buga – Tulua – La Tebaida – Calarca – Ibague – Girardot – La Mesa –
Bogotá)
533 Kilometres: 11 hours and 30 minutes
Then when the truck arrives to Bogota it goes to Distribuciones Chika which is our own
distribution enterprise with a warehouse in Zona Franca Bogota Cra 106 No. 15A-25
Casillero 3 Fontibon.
The tires will be unloaded in the warehouse (45minutes) two people helping to unload.
payment for each one is US $10. And merchandise is ready to be sold.
Finally, the 100 tires are sent to AutoGermana Pereira located in Avenida Circunvalar #
13-40 Centro comercial Uniplex L. 10, using the Hyundai HD 78.

10. This is the route used from Bogota – Pereira
Bogota – La Mesa – Girardot – Ibagué – Calarcá – Cruces – Pereira
290 Kilometres: 8 hours.

11. Route Km. Estimated time
Factory GoodYear to Callao’s Port 8.6 18 mts
From Callao’s Port To Buenaventura’s Port 2.083 1 one in the port of Callao + 2
days of way = 3 days
From Buenaventura’s Port to Distribuciones 11 hours and 30 minutes of
Chika (Zona Franca Bogota Cra 106 No. 15A- way + 45 minutes = 12 hours
25 Casillero 3 Fontibon) 533 and 15 minutes
From Distribuciones Chika (Zona Franca 8 hours
BogotaCra 106 No. 15A-25 Casillero 3
Fontibon) to AutoGermana-Pereira 290
Total estimated time: 5 days
DOCUMENTARY REQUIREMENTS:
FOR CUSTOMS AGENT OF PERU
 Copy of ID of legal representative of the company.
 Copy of deed of incorporation with social equity of not less $ 50,000.00 dollars.
 Affidavit of legal representative indicating his home and not have been convicted
with final judgments.
 Bank letter of guarantee or surety policy with a value of $ 150,000.00 dollars.
 A copy of the municipal operating license.
FOR CUSTOMS AGENT OF COLOMBIA
 Import Declaration
 Bill of lading
 Origin Certificate

12. Conclusions
It is viable to import the product based on the logistic costs because we are already users
of Free Trade Zone Bogotá and this is very important because of the costs of taxes. In a
Free Trade Zone, we only have to paid 15% of IVA, not 33%. For customs costs we paid
anything for importing. Additionally CAN agreement for tires has 0 taxes to import them.
In addition this agreement for our business creates an investment and trust incentive
between importers and exporters. Not only in the tire market also with other products of
the agreement.
The business relationship creates an excellent connection between both countries. In a
hypothetical case it is viable that the peruvian tires market in the future have a greater
confidence in our business and can export more merchandise to Colombia with loans and
financing issues without problems.

13. Bibliography
 BMW. Una vez más BMW Group es la empresa automotriz más sustentable del
mundo. Extraido el 11 de octubre del 2011 de:
http://www.bmw.com.co/co/es/insights/news/content.html
 Revista DINERO. 300.000 unidades en 2011. Extraido el 10 de octubre del 2011
de: http://www.dinero.com/edicion-impresa/especial-comercial/articulo/300000-
unidades-2011/135144
 BERNALES, E. (2009). Oportunidades de negocios en el Perú. Available on:
http://camara.ccb.org.co/documentos/5223_colperu_como_hacer_negocios_con_p
eru_1_de_septiembre.pdf. Consulted on October 3nd of 2011
 GESTION EL DIARIO DE ECONOMIA Y NEGOCIOS DEL PERU official web
page, available on: http://gestion.pe/noticia/283455/peru-tercer-mejor-pais-hacer-
negocios-region
 Banco Mundial. Doing Business 2011. Extraido el 12 de octubre de:
http://www.doingbusiness.org/reports/global-reports/doing-business-2011
 Revista Summa. Audi, Mercedes-Benz y BMW crecieron más de 19% en 2010 en
Colombia. Extraido el 26 de octubre del 2011 de:
http://www.revistasumma.com/negocios/8499-audi-mercedes-benz-y-bmw-
crecieron-mas-de-19-en-2010-en-colombia.html