Triumph Motorcycle May Consider Importing Fully Built Models From Thailand Due To Higher Tax On CKD Vehicles

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The recent import duty cut on CBU vehicles saw manufacturers like Ducati India, BMW Motorrad, Indian Motorcycle, India Yamaha Motor, Harley-Davidson India and Suzuki Motorcycle India slash the prices of their products. However, manufacturers who brought their products into the country via the CKD route were faced with a 5 percentage point duty hike. One of those manufacturers is Triumph Motorcycles India.

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The Indian arm of the British two-wheeler brand may reconsider its strategy of bringing motorcycles via the CKD route and instead opt to import fully built models from Thailand due to higher tax rates. Triumph Motorcycles imported 90 percent of the models from Thailand till last year. However, the brand decided to opt for local assembly from this financial and it now imports only 10 per cent of the product portfolio via the CBU route.

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“If the government keeps penalising this local assembly, most luxury automobile firms, including us, will have to rethink this India strategy. An additional 5 per cent duty translates into an outgo of about INR 150 million to INR 200 million on a turnover of INR 2 billion to INR 3 billion. It is a huge burden. India and Thailand have a free-trade agreement (FTA), and imports attract 10 per cent duty. Most global automakers had manufacturing plants in Thailand,” said Sumbly.

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Other manufacturers, who import their products via the CKD route are also worried about the price rise due to the increased taxes.

Source: Business Standard

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