Indian Govt. Slashes Import Duty, CBU Bikes to Get Price Drop Soon!
CBU Bikes to Get Heavy Price Drop Soon: Import duty plays a major role in pricing of superbikes in India. Broadly, these are categorized into CKD (Completely Knocked Down) and CBU (Completely Built Up) units. The former term is used when one considers local assembly while latter gets used for road ready imports.
CBUs in India will now cost less than before as government has introduced flat 50% slab for every motorcycle brought through CBU route. Earlier, it was 60% for bikes under 800cc and 75% for those above 800cc. A huge 25% of reduction in bikes above 800cc will definitely bring positive effects on liter class sport bike sales.
High end bikes like Yamaha R1, Harley Davidson CVO Limited, Indian Roadmaster and many more will get a considerably high price reduction. Few brands completely rely on CBU route for motorcycle sales and they will get the most benefits out of this decision.
Brands will soon revise their price lists to get the best out of these changes. CKD route with a motorcycle having unmounted engine and gearbox will also attract lower 25% tax slab in place of earlier charged 30%. The import of just engine and transmission components will cost them more with 15% of import tax.
This clearly means that government wants manufacturers to develop and manufacture engines here in India only. If they can localize most of the components, engine import will cost them more than before while manufacturers going for either CKD or CBU route will benefit from reduced taxes.
For example, Yamaha R1 is a CBU product and will get a reduction of 25% in its import duty. On the other hand, Ninja 1000 is a CKD product and could get a price hike if just engine for the same is imported. If every other part is also imported and assembled here, it will get a 5% reduction in tax.
Industry’s demand for reduction of taxes for high end products is finally fulfilled. It seems like India will get the highest ever superbike sales this year.