CBU vs CKD- What is that?

28 October 2011, 11.15pm

Ever thought of buying a car soon or in the future such as BMW, Mercedes, Audi or Ferarri? Well, there are a few things that you guys should be aware of before buying your really expensive favourite car.

Before I explain, I'm very sure that almost 90% of you guys don't know about this CBU and CKD thingy. It's basically about cars that whether it's locally assembled or fully imported. Why the worries and why should I explain the differences between these two? Here's why:

What is CBU and CKD?

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.

source-car blog india

So let me briefly explain

Basically CBU is fully imported cars and CKD is they get the parts from the manufacturer country and locally assembled. In Malaysia, we have a few car factories that practiced CKD such as Mercedes, BMW and Ford. For example, if I were to buy an Audi that is CKD. Therefore the parts will be from Germany but is locally assembled in Malaysia at the factory (with expertise of course). However, do you know that our government imposed 300% tax on imported cars? But why the price of the car is slightly similar (but in Malaysia it's slightly expensive). Okay like this, most of the imported cars now are mostly CKD and our government has imposed a rule that some parts of the car must be at least 30% local or imported parts (but not from the manufacturer country). For example, my Audi will be having 30% non-german parts, like the headlamps and leather seats could be from mitsubishi.

What is the differences between CBU and CKD?

Not much difference, but for a car enthusiast, a slight difference in driving pleasure can be felt because the car is not 100% pure perfect engineering from the manufacturer country. But overall, no difference between CBU and CKD.

So guys, hope you guys understand what I'm talking about because I think I'm crapping rather than explaining. :P. But please, if you have any questions to ask me, drop me a comment.