Colombia’s Economic Approach

Colombia has been one of the world’s major motorcycle markets for several years due to a combination of factors, but the primary ones were the end of their civil war and throttling the druggies.   When I rode in Colombia, many of the places we traveled through had been inaccessible until recently.   Colombia essentially opened up travel when the fighting and the drug running diminished.  This occurred in a country where the roads are mostly in the mountains and where there is little public transport.  People could suddenly travel freely and safely between communities, and that allowed the Colombian economy to boom.

The above led to a demand for cheap transportation, and motorcycles were the obvious answer.  Folks in Colombia like smaller bikes, and wow, did things ever take off.   Major motorcycle manufacturers from all over the world starting selling in Colombia, and the Colombian government saw an opportunity.   Basically, if you import a completely built up (known as a CBU) motorcycle, there’s a 30% import tariff.  But if you import a completely knocked down (CKD) bike in pieces, source something like 17% of the motorcycle’s content from Colombian manufacturers, and assemble the bike in Colombia, the tariff drops to around 3%.   I love that approach and I think it’s a real win-win situation.   Local jobs, lower tariffs, and great motorcycles made in the home country. I wish we had something like that here.

After our ride through Colombia, I had a tour of the AKT plant and their RS3 motorcycle assembly line, which essentially duplicates the Zongshen RX3 assembly line in Chongqing.   Take a look…