Nissan India Motor is planning to assemble its luxury sedan Teana in India in semi knocked-down condition by the end of February. This will help the company to price the competitively in the Indian market. Currently, consumers pay 110% duty on cars imported as completely built units (CBU).
“We have looked up all the option to increase volume. We are studying semi knocked-down (SKD) option for Teana,” said Kiminobu Tokuyama CEO and MD Nissan India. The SKD operation will start by the middle of next year. The car will be assembled at its Orgadan plant of Nissan-Renault in Chennai.
The Nissan manufacturing unit has an annual capacity of 2,00,000 units but it is utilising only 70,000 units for manufacturing Micra. At present, Nissan imports Teana, X trail small utility vehicle and its sports car 370Z in completely built unit from Japan.
Currently Nissan pays more than 100% duty which includes taxes such as countervailing tax, education and automobile cess. In comparison, the completely knocked-down unit (CKD) and semi knocked down unit attract basic custom duty of just 10% and even after addition of various duties it goes up to 25%.
“Import taxes on complete built vehicles are very high and make the car expensive. This has limited the growth of Teana,” said Tokuyama.
Since its launch in 2007, Nissan sold 764 units of Teana in India. The Japanese car maker plans to launch nine new vehicles in India by 2012. Of these, five models will be produced in India and four models will be imported from Japan.