<p>The company´s wholly-owned subsidiary Audi India assembles its sedans A4 and A6 and sports utility vehicle Q5 at the Volkswagen Group facility at Aurangabad in Maharashtra. These cars attract a custom duty of 10 per cent besides other levies of about 30 per cent, totaling to about 40 per cent duty.<br /><br />"Till now, there is no clarity on the new CKD norms and we are studying it at the moment. If the definition is changed, then one has to take a business decision. Out of the few options, one may make huge investments to localise the components," Audi AG Board Member (Marketing and Sales) Peter Schwarzenbauer told visiting Indian journalists here.<br /><br />When asked what would be Audi's decision if the new definition comes into play, he said: "We have some additional options for being a part of the large Volkswagen group. But we have to look for a business case here."<br /><br />Asked if the company would remain very low in the coming years as volumes are still very low, Schwarzenbauer said: "It could be an option, of course. It can´t be ruled out. However, this may be just one option."<br /><br />Schwarzenbauer, however, said for some manufacturers which doesn't have the backing of a group like VW, one of the options "could be that it's not worth it for the next 15-20 years and just get out of it (India)".<br /><br />The Indian Budget for 2011-12 had redefined the meaning of completely knocked down (CKD) units, understandably to encourage local production of automobiles.<br /><br />"A definition for 'CKD unit' of a vehicle, including two-wheelers, eligible for concessional import duty is being inserted to exclude from its purview such units containing a pre-assembled engine or gearbox or transmission mechanism or chassis where any of such parts or sub-assemblies is installed," the Budget provision said.<br /><br />Currently completely built units (CBU) attract an import duty of 60 per cent. With application of other levies such as VAT and contra-vailing duties, the total duty charge to import a full vehicle comes close to about 110 per cent.<br /><br />He further said had Audi not been with VW group, the business case would have been critical for the company. "I don't know what the government's long-term goal is. If it's a short term goal, the I can understand," he said, adding the Indian firms would also ask for lower duties when they would go for exporting their products across the world.<br /><br />"If you start to protect your own industry too much, you have to ask if this is your long-term strategy," Schwarzenbauer said.</p>
<p>The company´s wholly-owned subsidiary Audi India assembles its sedans A4 and A6 and sports utility vehicle Q5 at the Volkswagen Group facility at Aurangabad in Maharashtra. These cars attract a custom duty of 10 per cent besides other levies of about 30 per cent, totaling to about 40 per cent duty.<br /><br />"Till now, there is no clarity on the new CKD norms and we are studying it at the moment. If the definition is changed, then one has to take a business decision. Out of the few options, one may make huge investments to localise the components," Audi AG Board Member (Marketing and Sales) Peter Schwarzenbauer told visiting Indian journalists here.<br /><br />When asked what would be Audi's decision if the new definition comes into play, he said: "We have some additional options for being a part of the large Volkswagen group. But we have to look for a business case here."<br /><br />Asked if the company would remain very low in the coming years as volumes are still very low, Schwarzenbauer said: "It could be an option, of course. It can´t be ruled out. However, this may be just one option."<br /><br />Schwarzenbauer, however, said for some manufacturers which doesn't have the backing of a group like VW, one of the options "could be that it's not worth it for the next 15-20 years and just get out of it (India)".<br /><br />The Indian Budget for 2011-12 had redefined the meaning of completely knocked down (CKD) units, understandably to encourage local production of automobiles.<br /><br />"A definition for 'CKD unit' of a vehicle, including two-wheelers, eligible for concessional import duty is being inserted to exclude from its purview such units containing a pre-assembled engine or gearbox or transmission mechanism or chassis where any of such parts or sub-assemblies is installed," the Budget provision said.<br /><br />Currently completely built units (CBU) attract an import duty of 60 per cent. With application of other levies such as VAT and contra-vailing duties, the total duty charge to import a full vehicle comes close to about 110 per cent.<br /><br />He further said had Audi not been with VW group, the business case would have been critical for the company. "I don't know what the government's long-term goal is. If it's a short term goal, the I can understand," he said, adding the Indian firms would also ask for lower duties when they would go for exporting their products across the world.<br /><br />"If you start to protect your own industry too much, you have to ask if this is your long-term strategy," Schwarzenbauer said.</p>