What Is CBU And CKD Cars and Bikes ? CBU Vs CKD

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Most of the automobile publications use the words like CBU and CKD which may sound quite confusing to many. These terms are more commonly used in terms of the Imported automobile cars and bikes. In this post I will share the meaning of these terms CBU and CKD under as some of the auto basic terms in simple language.

CBU – Completely Built Unit

Completely built unit is the terminology when a car/bike/automobile is imported/exported to/from some other country as a complete car fully assembled. These automobiles do not require an assembly before they can be sold out to the buyers in the target country’s markets. Most of the imported cars and bikes in India come as a CBU.

CKD – Completely Knocked Down

Completely knocked down car / bike /automobile is one which is imported or exported in parts and not as one assembled unit. Such units are first sent to an assembly plant in the target country where all these parts are assembled and one complete car / bike / vehicle is made using the imported components. These kinds of units generate employment in the target country as more machinery and manpower investment is needed to assemble the components to make the vehicle.

CBU

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CBU Vs CKD

CBU and CKD do not differ much in terms of technological sense except for the fact that CBU cars / bikes / vehicles are assembled in the same country where they originate and then exported to the target country. CKD cars / bikes / vehicles are assembled in the target country where all the parts of the vehicles are assembled and then sold to the end customers.

When talking from Indian perspective, CBU and CKD have a sharp difference in the import duties. At present, the import duties on a CBU vehicle coming to India from abroad is liable for an import duty of nearly 110% while the CKD attracts 60% duty. This sharp difference is strategically kept like this because CBU does not create as much of revenues and employment for the target country (India in this case). A CKD when assembled in the target country requires technology, infrastructure and manpower investment which generates business and employment opportunities in the target country, which is why it is motivated.

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61 COMMENTS

  1. […] its sedan Maruti Suzuki Kizashi in India on 28th January 2011. The car will initially come as CBU to India and Maruti may eventually go for local assembly option if the sales numbers are promising […]

  2. Kindly consider beneath cited lines from the second paragraph, I think there is some error, as CBU should be in lieu of CKD, isn’t it??

    the import duties on a CKD vehicle coming to India from abroad is liable for an import duty of nearly 110% while the CKD attracts 60% duty

  3. want to know what is c.k.d in auto industry and in customs term.
    Is an essential character of a vehicle constitute a c.k.d. even when not mounted.

  4. I am planning to buy a new car in April 2011. I have shortlisted the
    C 220 d, (economy) VW passat/jetta dsg diesel. If it’s like the import duty is slashed by 40 % (phenominal is in it) . How long should I wait.

  5. You can wait until April 2011 if you want to, there may or may not be any decisions on this, so wait at your own risk. There maybe a price rise because of budget changes in coming week.

  6. This results in initial employment but have long term dermerits for our future generations due to pollution,overuse,congestion , especially , in countries like india where population is MULTIPLYING & resource scarcity is increasing.This , at last, will diminish quality of all organisms on earth, especially near equator.We must be aware that Globe is not warming but globe is warning us…

  7. Hi can any body explain me what is the import duty structure for import of CKD & CBU unit of battery operated golf cars pls

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