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Imported vs Made in India Cars : A Probe into the Indian Automotive Industry

Imported vs Made in India Cars : A Probe into the Indian Automotive Industry

As we inch closer to celebrate India’s 70th Independence day, we bring to you a detailed insight about the actual price difference between an Imported car and #madeinIndia car. In order to understand the difference, one needs to understand the basics first. You might have pondered upon words like CBU, CKD , SKD often while reading the brochures of any high end sports car. Here is exactly what they stand for-

 

CBU – Completely Built Unit

A Mercedes Car coming as CBU unit

CBU is the wording when a car/bike is foreign made/sent out to/from some other nation as an entire car completely amassed. These autos don’t require a get together before they can be sold out to the purchasers in the objective nation’s business sectors. The majority of the foreign made cars and bicycles in India come as a CBU.

 

CKD – Completely Knocked Down

CKD route means that the car is transported in or sent out in parts and not as one gathered unit. Such units are first sent to a gathering plant in the objective nation where every one of these parts are amassed and one finish car/bike/vehicle is made utilizing the foreign made segments. These sorts of units create work in the objective nation as more hardware and labor speculation is expected to collect the parts to make the vehicle.

CBU and CKD don’t contrast much regarding mechanical sense with the exception of the way that CBU cars/bicycles/vehicles are amassed in a similar nation where they begin and after that sent out to the objective nation. CKD cars/bicycles/vehicles are collected in the objective nation where every one of the parts of the vehicles are gathered and afterward sold to the end clients.

 

When talking from Indian point of view, CBU and CKD have a sharp distinction in the import obligations. Currently, the import obligations on a CBU vehicle coming to India from abroad is subject for an import obligation of almost 125% while the CKD draws in 60% obligation. This sharp distinction is deliberately kept like this on the grounds that CBU does not make as quite a bit of incomes and work for the objective nation (India for this situation). A CKD when gathered in the objective nation requires innovation, foundation and labor speculation which produces business and work openings in the objective nation- one of the main reason that it is pushed more by the local authorities.

The CBU, CKD, and SKD are the terms to depict the way of bringing in a car in a particular country. Since the laws and import obligations of every country are different, the makers attempt to use the most fitting and helpful system for themselves. In India, the government charges too high a premium on an import of a vehicle from some outside nation and this is basically done to urge the makers to create the vehicles in the nation itself which in turn would bring generate more employment and improve the economy. Be that as it may, for the most part the auto companys those are questionable about the achievement of their new item, pick to run with the immediate import technique. Be that as it may, what is the immediate import strategy? This is accurately what is known as CBU (Completely Built Unit). In a CBU import, the entire car/motorbike is sent from nation of its manufacture to the country in which it is being sold.

This route of CBU(completely build up unit) method fetches a hefty import duty of 125 percent of the car’s worth !

So just to simiplify things and put them in percepective- A Ford Mustang V8 is sold in US for approximately $30000 which rougly translates into INR 20 Lakhs. Now since the car is imported directly in India via the CBU route, it has been priced at Rs. 65 Lakhs! – Almost three times the price of the car, thanks to the heavy excise duty!

Similarly the recently launched Lamborghini Aventador S has an approximate price of $300,000 in USA which translates into around Rs. 3 Crore. Since the car is imported directlyas a CBU, it amounts upto a whopping Rs. 6.5 Crore + with all the taxes and duties paid!

There have also been concerns in the past over build quality of locally manufactured cars vs the ones that made and imported from Eastern countries like Germany and Italy. But this issue isnt that big if you compare it with the number of jobs a local car plant generates and keeps India’s money within the country, helping and boosting over economy! 

Stay tuned to www.exhibitauto.com for more such news and updates from the Indian Auto Industry. Till then lets look forward to a very Happy Independence Day and lets keep on supporting #MakeinIndia by buying indigenous cars!

 

Imported vs Made in India Cars : A Probe into the Indian Automotive Industry
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