CKD kits of Maruti Suzuki Ertiga to be exported to Asian countries

Maruti Suzuki, the largest automobile manufacturer in India, has decided to export CKD kits of its new Maruti Suzuki Ertiga. CKD refers to Completely Knocked Down, which is a kit that includes various unassembled parts of a car. Maruti Suzuki Ertiga, a multi-passenger vehicle (MPV), will be launched at the AutoExpo in Delhi, in January, 2012. As a matter of fact, Maruti Suzuki India is the highest car producer for Suzuki Motor Corporation in Japan.

The Maruti Suzuki Ertiga is a seven seater multi-passenger vehicle that will come in two variants namely, a 1.4-litre K-series engine and 1.3-litre turbocharged diesel engine.

Managing Director of Maruti Suzuki India, S. Nakanishi said, "There is a great potential to export vehicles as CKD in many markets in Asia. Maruti will act as the biggest supplier of cars to the parent SMC and to start with we will dispatch Ertiga MPV and other new models from next year.”

Maruti Suzuki also plans to export its new Swift DZire in the CKD form, early next year. The completely knocked down exported kit will have wheel rims, suspension parts, fuel tank, steering unit, transmission systems, brakes and engines.

There are plans to initially export the CKD kits to Asian countries like Indonesia. Maruti Suzuki hopes to tap the potential of the Indonesian automobile market. In Indonesia, 26% of tax is levied on a fully imported car, whereas only 10% is on the CKD unit.

Hence, it becomes much more beneficial for companies to export CKD units in the country. It is much cheaper as compared to setting up an entire manufacturing unit. The cost involved is reduced as the parts are produced in India.

Suzuki Motor Corporation wants to export more cars manufactured by Maruti Suzuki India. It will also be increasing the production capacity of its manufacturing plant in India to 20 lac vehicles by 2015.