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Maruti Suzuki plans to take CKD route to Asian markets

By Motortrend India Staff   |   05 December,2011

India’s leading carmaker Maruti Suzuki plans to start exporting select models as completely knocked down (CKD) kits, beginning with its new multi-passenger vehicle Ertiga, which it plans to launch at the Auto Expo in Delhi next month. The company, which produces more vehicles than its Japanese parent Suzuki Motor Corp (SMC), is eyeing larger volumes in the lucrative export market, a top executive said.

“There is a great potential to export vehicles as CKD in many markets in Asia,” Maruti Suzuki India MD S Nakanish said. “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,” he added.

Ertiga, a seven-seater MPV which will be available in 1.4 litre petrol and 1.3 litre multijet diesel engine options, will be initially shipped to Indonesia and later to Thailand. The CKD kits will include critical parts, such as engine and transmission, fuel tank, wheel rim, brakes, parts strengthen of suspension and steering that will be sealed and dispatched from the company’s Manesar plant.

In Indonesia, where Suzuki enjoys a 9 percent share, Ertiga will compete with other seven-seater models such as Toyota Avanaza and Daihatsu Xenia. Cars dispatched as components and assembled in overseas markets invite lower taxes, making them more competitive. In Indonesia, where the import duty on fully imported cars is 26 percent, cars brought under the CKD route invite a much lower 10 percent tax.

The move is aimed at strengthening Suzuki Motor Corp in the highly competitive South East Asian markets. Maruti Suzuki, which is ramping up its production facilities in India to target annual production of 20 lakh units by 2015, will eventually export more cars under the Suzuki badge.

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