Completely Built Up (CBU) And Completely Knocked Down Unit (CKD) Explained
Here’s all you need to know about CBUs and CKDs
If you’ve been following automotive news for a while now, you might have come across terms such as ‘CKD’ and ‘CBU’. But what do they actually mean? Simply put, they are terms for the two methods of importing a vehicle into the country. But how does that affect you as a buyer? Let’s take a closer look:
Completely Built Up (CBU):
CBU refers to vehicles which are directly imported into the country as a whole unit. Usually, manufacturers of high-end vehicles such as Ducati, MV Agusta and Indian Motorcycles opt for this route to bring their motorcycles to our shores. As these machines are imported from a different country, they attract a higher tax rate, a whopping 50 per cent to be precise! Now you might be thinking why not build these motorcycles here instead? Wouldn’t that offer immense savings for the buyer? The thing is, the customer base for premium motorcycles in India is limited and rather than setting up a new manufacturing facility in the country, it’s easier for manufacturers to directly import them here.
Completely Knocked Down (CKD):
This one’s a bit tricky. In this category, manufacturers can bring their vehicles via two routes: Semi Knocked Down Unit (SKD) or Completely Knocked Down Unit (CKD). Under the SKD method, manufacturers bolt on the engine, gearbox or transmission mechanism while the rest of the bits are partially assembled. A vehicle is said to be a CKD offering when each component comes in bits and pieces and is assembled here from the ground up, making it quite a cost-effective way to do it. When it comes to taxation, the SKD route carries a tax of 25 per cent, whereas CKD units attract just 15 per cent.
CFMoto is a great example of how much of a difference it makes when a vehicle is brought in via the CKD route. The Chinese manufacturer has priced its entry-level motorcycle, the 300NK, at a mouth-watering Rs 2.29 lakh, while the entire 650cc range retails from Rs 3.99 lakh to Rs 5.49 lakh. Another fine example is Kawasaki, who did the same with the ZX-10R. Priced at Rs 13.99 lakh (ex-showroom Delhi), the Kawasaki offering is the cheapest litre-class motorcycle on sale in India.