Audi, BMW and Mercedes to be affected by CKD duty

The auto industry was abuzz with the confusion regarding the completely knocked down kits, the government has gradually given its verdict concerning the CKD kits. The Finance Minister made it clear that the duty levied on individual parts such as engine and gearbox will be 10 per cent, however the duty levied on the pre assembled engine and gearbox separately will be about 60 per cent. Auto biggies like Skoda, Toyota, Honda and Volkswagen can take a sigh of relief as they will not be affected with it.

On the other hand luxury car makers like Mercedes, Audi and BMW might have to make some changes in the way they import their completely knocked down kits for cars like Mercedes C-Class, Audi A4 and BMW 3-Series. These luxury auto makers will have to end up paying a heavy 60 per cent duty on the import of pre assembled engines and gearbox, unless they change the way to import their CKD kits for the above mentioned luxury cars.

Few days back the German auto giant Audi had threatened that it might pull away its investments or even put a stop to its CKD operations in India due to the increase in the import prices. The company thinks that the hike in the import duty will lead to decrease in the sales of completely knocked down cars in India. Audi on the other hand witnessed hike in the sales of cars in the month of February. The German auto giant posted a growth of whooping 79 percent in February.

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