Weeks ago, we brought you a story about German automaker Audi planning to assemble the Q3 and Q7 crossovers in India, through completely knocked down(CKD) kits at its Aurangabad plant in Maharashtra. Back then, we didn’t have an exact time frame on when the assembly of the Q7 Crossover would begin even as the other CKD model, the Audi Q3 Crossover is lined up for a launch in the middle of 2012. According to a news report, the Audi Q7’s CKD assembly is all set to begin from the end of 2012. CKD assembly of this crossover is expected to bring down prices by about 20% due to the lower duty on CKD assembly.
Currently, the Audi Q7 crossover, which is Audi’s flagship SUV is imported into India through the completely built unit(CBU) route, which attracts an import duty of 60%. On the other hand, CKD assembly will attract only 30% import duty, which will further fall to 10% if the engine and transmission is also assembled in India. Audi dominates the high end luxury SUV segment with its Q range of crossovers which have been top sellers for the German brand. From 2011, Audi has also been assembling the Q5 crossover through the CKD route, and along the way, the Q5’s prices were also cut substantially.
The Indian government has been pursuing a policy of encouraging more automotive manufacturing in the country. More manufacturing means more jobs for the locals and more investment in the country. This is the main reason why a hefty import duty is levied on automobiles imported directly into India. Apart from protecting the local auto industry, high import duties has meant that many manufacturers like Audi, BMW and Mercedes Benz have begun assembling many of their high selling car and SUV models in India through the completely knocked down route.