Hopeful of finding amicable solution to new CKD definition: BMW

MUNICH: Luxury car maker BMW today said it is hopeful of the auto industry and the Indian government finding an amicable solution over the controversial new definition of completely-knocked down ( CKD) units introduced in the country's Budget 2011-12.

"I think it is in the interest of the industry and the Indian community, (that) there will be a definition that allows development taking place in stages from a CKD environment to full production," BMW Board Member marketing Ian Robertson told reporters here.

Unlike its compatriot Audi, which took a strong stance and even said the new definition could force it to scale back operations in India, BMW said at the moment it is too early to say what could be the repercussion of the new norms.

"We see India as a growth market. As the market grows, manufacturing is a logical step. I do hope the definition will become (such) that all the parties will benefit," he said.

Finance Minister Pranab Mukherjee in his Budget has proposed a new definition of CKDs imports, which would require car makers to assemble engines, gearboxes and transmissions in India in order to avoid higher tax tariffs.

CKD imports attract 10 per cent customs duty in India, which coupled with other local cess comes to a total of about 40 per cent overall.

Asked, if the new definition remained unchanged would BMW look at bringing completely built cars from outside India and not assemble at its Chennai plant, Robertson said it is too early to comment on such a move.

"I think it is too early to assess anything. India is a great market. I think in the interest of the industry and the country, they will evolve one solution," he said.