Start assembling engines locally to comply with new norms
The Indian government was quick to implement the new CKD (completely knocked down) unit norms for this financial year, which categorise the import of assembled engines and transmission units of automobiles as CBU (completely built units), thereby attracting a 30 per cent import duty on them individually.
To comply with the same, German auto giant BMW have begun assembling the engines of their 3 and 5 Series of sedans and the newly launched X1 Softroader at their Chennai plant from April this year, as a result of which they will not hike the prices of their existing models in India.
However, BMW have expressed their disappointment over the government’s decision to implement the new import policy without consulting the industry. The company is a part of the manufacturers’ association (SIAM) which has asked the government to extend the time-limit for implementing the new norms to two years. Currently, 50 per cent of the engine and transmission assembly of these cars is being done at BMW’s Chennai plant.
BMW plan to increase the localisation of these cars to 100 per cent as and when they reach the proper sales volume.
