Increased CKD may result in localization for luxury cars?
Audi, BMW, Mercedes-Benz, Volkswagen are looking forward to increase the Indian connection, as a result of the new revised duty on Completely Knocked Down (CKD) unit. It is speculated that these auto giants might setup or locally procure the parts. If this step will not be taken the auto giant is likely to face increased price tag which will further lead to sales downfall.
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As per the reports floating in after the increments on transmissions, gearboxes, engines which are assembled in foreign countries which use to attract the duty of 10 per cent, has now been raised to 30 per cent. This step has created an uproar and Society of Indian Automobile Manufacturers has approached the Indian government to implement the rule after one and a half or three years time. While none of the international makers have announced price hikes. As per a technical expert these parts can be further divided into two or more than that which will help in extracting an excise duty of 10 per cent.
BMW is thinking about manufacturing the parts locally in Chennai at its facility where already the German's make BMW 3 series and BMW 5 series sedans and the SUV BMW X1. However the homeground rivals who are enjoying the top position is not willing increase the price of its cars. Mercedes-Bnez imports the engines from Force Motors the Pune based auto firm for Mercedes C class and Mercedes E class while Mercedes S class engines are imported. While Volkswagen is still deciding on to increase the price of its cars or not.
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