BMW India has been quite fast in adapting itself to the new CKD duty norms. As per the latest information, BMW India has already started assembling locally in its Chennai Plant up to half of its engines needed in Indian BMW cars. By following the new norms, BMW India is able to keep the prices of the cars unchanged. BMW is now importing engine parts and assembling the engines locally in India, which makes BMW liable to pay 10% duty on the engine parts. On the other hand, the assembled engine units attract three times duty. So by adapting quickly to the new norms, BMW has started assembling engines for BMW 3 Series, BMW 5 Series and BMW X1 SUVs in India.
While the BMW is assembling the engines for the 3 series, 5 series as well as X1 SUVs, BMW yet imports assembled engines for the costlier cars like BMW 7 Series, BMW Z4, X5, X5 and other cars which don’t sell in India in higher volume. Also in the longer run, BMW plans an even higher level of assembly of cars in India as the volumes increase considerably to justify the additional cost of setting up the infrastructure.
So if you have been planning to buy a BMW, it must be a good news that BMW is not increasing the price of its cars because of the increased CKD duties.
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