Completely Knocked Down (CKD) Kits is an acronym for kits of the loose parts necessary to assemble a complete vehicle in a customer’s own plant.
It is common practice among makers of Cars / Commercial vehicles (trucks and buses) / Rail rolling stock to sell their products to their foreign licensees in loose kits respecting knockdown standards defined during the commercial negotiations, on the basis of the company’s industrial capability (plant, equipment and machinery).
Customers have the following main goals:
- To obtain better customs import conditions than those for complete vehicles
- To support the policies of local governments by favouring the use of local manpower
- To lower logistic and transport expenses for complete vehicles, compared to those for kits of loose parts.
On average, the selling price of the vehicle assembled on the local market is lower than that of an imported complete vehicle; the percentage cost reduction varies from Market to Market, even with small volumes.
The assembly of products using CKD methodology allows companies in emerging markets to acquire “expertise” in various sectors and therefore to favour the country’s industrial development, while also enabling world manufacturers to expand into new markets that would otherwise be inaccessible because of the high customs duties for import of CBU vehicles.
Occasionally, in order to obtain further privileges, the manufacturers contact local companies in the area to localise production of components and/or lightening of specific parts.
It is also possible to supply the Client with kits that are only divided into assemblies and fundamental parts, and these are known as SKD or Semi Knocked Down Kits.