Further, HMI has decided to send vehicles in completely knocked down (CKD) unit format to select export markets in the backdrop of their increased tax rates for completely built units (CBUs). Using the CKD format will also help the company get additional volumes at its Sriperumbdur facility to cater to the domestic market.
Koo said that CKD export started recently and that the company expected to send around 50,000 units by 2019 in that format.
CBUs refer to vehicles that are directly bought in ready shape for sale, while CKD units refer to vehicles whose parts are officially imported from foreign countries and then assembled in the country of sale.
HMIL's facility near Chennai has been catering to nearly 83 countries, mostly by way of CBUs. After Vietnam and the Philippines increased tax rates for CBUs, the company started exporting vehicles in the CKD format.
Koo said that since more countries in Asia, Africa, and South America were increasing tax rates for CBUs, HMIL was planning to send its vehicles in the CKD format.