Automakers seek 18-month CKD import relief

The automobile industry has sought an 18-month respite from higher import duty on completely knocked down (CKD) operations.
Having failed to convince the government to scrap the provision, the Society of Indian Automobile Manufacturers (SIAM) has sought time before implementing it, SIAM president Pawan Goenka said.

Finance minister Pranab Mukherjee has levied 30% import duty on CKD kits including pre-assembled engines or gearboxes for either cars or two-wheelers, up from 10% at present.

The provision will adversely impact almost all CKD imports since engines and gearboxes are typically the last products to be localised.

Luxury car makers such as BMW and Audi, bike maker Harley Davidson would feel the maximum impact of the new provision.
Other vehicle makers would also be hit in their respective CKD operations.

Suzuki Kizashi, Hyundai Santa Fe, products from the Jaguar Land Rover, which Tata Motors was planning to import in CKD for assembly and sale in India — all these products and their possible assembly here would now be impacted.

In fact, after the Ssangyong buyout, Mahindra & Mahindra had also spoken of bringing some of the Korean company’s flagship products to India as CKD.

Asked whether SIAM itself was a divided house on the CKD issue, Goenka said SIAM’s stand on the issue was formulated after consultations with all stakeholders.