Prices of Completely Knocked Down (CKD) kit imported cars may see a price hike as the Union Budget 2011-12 talks about a new proposal where all vehicles with pre-assembled engines and transmissions has been excluded from availing concessional import duty of 10%. This would result in CKD operations being classified as CBU imports resulting in higher custom duties.

This has lead to a huge panic among the German camp, who use CKD for almost all their vehicles in India. This would also mean some Toyota and Honda cars will see a price hike as the Japanese companies import engines for some of the vehicles. SIAM has asked for a clarity on this matter from the Government. Whereas such Government officials have encouraged the move, defending with the words “local manufacturing will boom.”