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What do CBU and CKD mean in automobile?

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Toyota Prius
A CBU Toyota Prius

Often when you are buying a new car or reading the information about your desired cars, you may have come across some weird terms such as CBU and CKD. These terms usually appear in some countries that impose excise duty on imported vehicles such as Malaysia, India, China, and Thailand. What is actually CBU? What does CKD means? In this article we will explain what they mean and the differences between CBU and CKD.

Generally, CBU and CKD are terms used to describe the way of importing a vehicle into the country. CBU stands for Complete Built Up and CKD stands for Complete Knock Down.

CBU – Complete Built Up

A CBU import means a vehicle is completely built out of the country. The vehicle is tested and it can be driven once it lands on the shores. If a vehicle is tagged as CBU import, it means the vehicle is imported to the country as a whole piece. A CBU import does not mean that the vehicle is 100% built in its origin country. For example, a CBU Honda Civic imported to Malaysia can be assembled in Japan (Honda’s origin country) or some other Honda plants in either Thailand or Indonesia. However, most of the time but not always, the import will be done by picking the nearest country. Most Hondas in Malaysia are imported from Thailand due to the geographical location. The quality of a CBU vehicle very much depends on the QC (Quality Control) of the plant.

CKD – Complete Knock Down

A CKD vehicle means a vehicle is assembled locally using all the major parts, components, and technology imported from the country of its origin. Government imposed excessively high taxes on CBU vehicles to encourage foreign car manufacturers to build factories and produce their vehicles in the country. This would help the country’s economy as well as to increase the employment rates. This is the reason why we see more and more CKD vehicles available in the country.

CBU vs. CKD

The biggest difference between CBU and CKD is the taxes. A CBU unit could have cost 30% more of a CKD unit. However, quality of the vehicle is the first concern of consumers. A Mercedes-Benz completely built in Sindelfingen plant will definitely have some difference with other Mercedes-Benz’s plants. This has also explained why the Sindelfingen plant was presented with the J.D. Power Award by the renowned U.S. market research institute J.D. Power and Associates.

Popular CBU vehicles in India:

Aston Martin DBS, Audi R8, Bentley Continental GT, BMW Z4, Ferrari 458 Italia, Fiat 500, Honda Civic Hybrid, Honda CR-V, Lamborghini Aventador, MINI Cooper, Nissan GT-R, Porsche Boxster, Toyota Prius, Toyota Camry, Volkswagen Tiguan, Volvo S80, and others.

Popular CKD vehicles in India:

BMW 3 Series, BMW 5 Series, Ford Figo, Ford Fiesta, Chevrolet Cruze, Chevrolet Tavera, Honda Brio, Honda Jazz, Honda City, Honda Civic, Honda Accord, Hyundai Sonata, Hyundai Accent, Suzuki Swift, Nissan Sunny, Toyota Corolla Altis, Toyota Fortuner, Volkswagen Polo, Volkswagen Jetta, Volkswagen Passat, and others.

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