[Rachit.K.Dogra]

Originally Posted by CrAzY dRiVeR

Same initial impressions from me - as this is contradicting the 'Make in India' movement. But...

After readings all the related articles today regarding Trump's response - it is pretty clear that - a) The move was due to US pressure on the Indian Government and b) That the PM had called and informed Trump regarding this import tax reduction and c) Obviously - US is not happy about the reduction to 50% either. Because they have a free tax structure for motorcycles being imported from India to US (I'm guessing he is referring to Royal Enfield and KTM).

They expect India to have 0% taxes for US imported motorcycles, or they would place a 50% import tax on vehicles imported from India.

Remains to be seen whether - a) Indian Government will ignore this aggression from US (Unlikely) b) Reduce CBU taxes to 30% or so to make it only marginally more than SKD or c) Only grant free trade for US imports (like we 30% for CBU imports from Thailand) so as to appease US and still keep some control on the imports.

Personally - I feel that option 3 is likely to happen. The prime beneficiary of this deal could be Harley Davidson as the motorcycles and spares cost could come down.

I am not sure why, but this Trump angle is a bit strange for me. The reason being, I don't think Harley sells as many bikes in India for Trump to actually come in and Slam India. I mean what is amount of gain that Harley can have. 5-10 Crores at the max. Will Trump slam every possible angle where industries from US can gain 5-10 crores? If Yes, well then he will have a lot of slamming to do.

Now, the second thing, why penalize CKD ones. I mean the companies who made investments in India are now getting penalized for no reason at all. In this case as well, the 5% gain from CKD volumes is not too large for India to risk its earlier commitments of 'Make in India'. These are just misguided messages that India as a country is giving to manufacturers in the world. I remember when all the noise around Diesel cars ban happened in India, Toyota had releases a statement saying that they have put all investments in India for hold.

As I a biker have nothing to complain here as my dream bikes will mostly get cheaper, but I wouldn't bet on this move for long honestly.

Rachit

[Vishnuk]

Originally Posted by CrAzY dRiVeR

Thanks for pointing it out. Looks like the FTA with Thailand caps the import duty at 30% as against 75% earlier (and 50% now).

Originally Posted by Vishnuk

Not able to get any document on this, but duty on bikes above 800cc imported from Thailand was pretty low from 2009 and is supposed to be "zero" from 2014 onwards.

Originally Posted by Turbanator

Since India and Thailand have an FTA (Free Trade Agreement), import duties are significantly less despite the bikes being brought in via the CBU route. Even the new Panigale V4 will be coming from Thailand, hence the competitive pricing.

Finally managed to get this, the duty is not just less, its 'zero'.Excerpt from Ducati India MD's interview
"... the best arrangement now is to import from Thailand. Due to the FTA, the bikes are imported at zero duty,"
Full article link here https://auto.economictimes.indiatime...sales/60332899

[theredliner]

Originally Posted by Vishnuk

Due to the FTA, the bikes are imported at zero duty,"

Whoa. In that case, Kawasaki, Ducati and others who have been importing bikes from Thailand are ripping us off with huge margins while we're praising them for good pricing.

A Ninja 1000 ABS which costs $12.2k in US (with zero duty) costs $15.6k here.
A 959 Panigale which costs $15.3k in US costs $22.5k here.

[Turbanator]

Due to the FTA, the bikes are imported at zero duty,

Most of these manufacturers were sending SMS and making calls to hurry-up purchases in view of the increase of 5 % customs after the recent budget and now when there is a reduction, not even a single manufacturer has come out with reduced prices till now. I asked BMW sales guy yesterday if they plan to pass 25 % reduction as they were considering a 5% proposed hike recently and he was like.. explaining to me how custom is levied on basic rates and then there is GST and all that.

And Zero Duty - wow!

[CrAzY dRiVeR]

Originally Posted by Vishnuk

Finally managed to get this, the duty is not just less, its 'zero'.Excerpt from Ducati India MD's interview
"... the best arrangement now is to import from Thailand. Due to the FTA, the bikes are imported at zero duty,"
Full article link here https://auto.economictimes.indiatime...sales/60332899

Interesting. But why would they do CKD at all then? Looks like a very unfair taxation strategy in that case from our government, and certainly against the 'make in India' initiative which is the reason often quoted for the very high import duty on CBUs.

Originally Posted by theredliner

Whoa. In that case, Kawasaki, Ducati and others who have been importing bikes from Thailand are ripping us off with huge margins while we're praising them for good pricing.

A Ninja 1000 ABS which costs $12.2k in US (with zero duty) costs $15.6k here.
A 959 Panigale which costs $15.3k in US costs $22.5k here.

Ninja 1000 is a CKD, not a CBU.

If CBU was zero percent tax, wonder why they would do a CKD at all!

And the comment coming from Ducati is even more interesting because they are certainly much pricier in the Indian context too. Confused!

[theredliner]

Originally Posted by CrAzY dRiVeR

Ninja 1000 is a CKD, not a CBU.

If CBU was zero percent tax, wonder why they would do a CKD at all!

And the comment coming from Ducati is even more interesting because they are certainly much pricier in the Indian context too. Confused!

Sorry, I got it confused with Z900 which is a CBU unlike the SKD Ninja 1000.

Z900 ABS in US costs $8.8k
Z900 ABS in India costs $12k. A huge ripoff.

Originally Posted by Turbanator

Most of these manufacturers were sending SMS and making calls to hurry-up purchases in view of the increase of 5 % customs after the recent budget and now when there is a reduction, not even a single manufacturer has come out with reduced prices till now. I asked BMW sales guy yesterday if they plan to pass 25 % reduction as they were considering a 5% proposed hike recently and he was like.. explaining to me how custom is levied on basic rates and then there is GST and all that.

Ugh, a bunch of unethical scumbags.

[dextor]

As per this Thailand FTA agreement, does it also mean that as an end user, I can also buy some vehicle in Thailand & import it to India & pay no import tax on that?
Or the handling is something different for end user?

[theredliner]

Originally Posted by dextor

As per this Thailand FTA agreement, does it also mean that as an end user, I can also buy some vehicle in Thailand & import it to India & pay no import tax on that?
Or the handling is something different for end user?

AFAIK, the duties charged for personal imports and commercial imports are different. I don't think any FTA applies to personal imports.

This can be seen with something like riding gear too. Resellers import at much cheaper duty rates where as private imports are charged at a whopping ~40%.

[CrAzY dRiVeR]

Originally Posted by theredliner

A Ninja 1000 ABS which costs $12.2k in US (with zero duty) costs $15.6k here.
A 959 Panigale which costs $15.3k in US costs $22.5k here.

Originally Posted by theredliner

Sorry, I got it confused with Z900 which is a CBU unlike the SKD Ninja 1000.

Z900 ABS in US costs $8.8k
Z900 ABS in India costs $12k. A huge ripoff.

My doubt still is -

Why did companies like Suzuki and Kawasaki go to the headache of CKD assembly if CBU was absolute zero duty? Ninja 1000 was a CKD with kits from Thailand. Wouldn't it have been much easier for them to just import it directly from there? And seeing the price too - Ninja 1000 seems to have less difference with US as compared to the CBU Z900.

I'm feeling we are missing something and "zero" might not mean an actual zero - when SKD itself is 25%. Otherwise, it just doesnt make sense how CKD bikes were priced much better till now even compared to these Thailand CBUs.

Digging further.

[theredliner]

Originally Posted by CrAzY dRiVeR

My doubt still is -

Why did companies like Suzuki and Kawasaki go to the headache of CKD assembly if CBU was absolute zero duty? Ninja 1000 was a CKD with kits from Thailand. Wouldn't it have been much easier for them to just import it directly from there? And seeing the price too - Ninja 1000 seem

You've got a point there.
AFAIK, Ninja 1000 is brought in from Japan as SKD. So I suspect, it is not manufactured in Thailand. Need to see if Ninja 1000, Hayabusa etc. have manufacturing setups in Thailand.

Also, need to see why Ninja 300 is brought in as CKD from Thailand.

[Turbanator]

Why did companies like Suzuki and Kawasaki go to the headache of CKD assembly if CBU was absolute zero duty?

One reason I can think of is the profits they get on trading a CBU unit vs sales on a CKD unit. So chances are they may get CKD at lower rates and even after adding costs of assembly/ plant they earn more over CBU. Also in some companies, Traded Imported products are reflected separately on the balance sheet and may not be considered for Turnover/ Sales based incentives for senior management. Besides, they can get some parts localized if a particular model is successful thereby having more profits.

[riteshritesh]

Originally Posted by Vishnuk

"... the best arrangement now is to import from Thailand. Due to the FTA, the bikes are imported at zero duty,"
Full article link here https://auto.economictimes.indiatime...sales/60332899

Bikes above 800 cc are at Zero Duty. Rest all at 5% from ASEAN countries. Attaching the FTA notification ( S. No 1484).
HS code 871150 is for 800 cc and above.

As per this Thailand FTA agreement, does it also mean that as an end user, I can also buy some vehicle in Thailand & import it to India & pay no import tax on that?
Or the handling is something different for end user?

No. To get FTA benefits, the exporter is issued a Preferential Certificate of origin, which gets debited at the timeof import clearance process in India. This can happen only with companies having an IEC. If an individual buys from a retail shop, he won't be able to get the Preferential CoO.

[infinitewheel]

Does anyone have the list of superbikes in each company which are CBU and CKD at present in India?

[Vishnuk]

Originally Posted by riteshritesh

Bikes above 800 cc are at Zero Duty. Rest all at 5% from ASEAN countries. Attaching the FTA notification ( S. No 1484).
HS code 871150 is for 800 cc and above.
.

Thank you for sharing this.

Originally Posted by Turbanator

Besides, they can get some parts localized if a particular model is successful thereby having more profits.

You are bang on with the last line. There was a statement from the DMD of IKM stating that the localisation rates on their bikes is as high as 40%.
http://www.autocarpro.in/news-nation...kd-models-6588

Originally Posted by CrAzY dRiVeR

My doubt still is -

Why did companies like Suzuki and Kawasaki go to the headache of CKD assembly if CBU was absolute zero duty? Ninja 1000 was a CKD with kits from Thailand. Wouldn't it have been much easier for them to just import it directly from there? And seeing the price too - Ninja 1000 seems to have less difference with US as compared to the CBU Z900.

Digging further.

Could be any of the three reasons or the Googly:
1) Probably because their localisation content is high and it was cheaper for them to import the remaining parts.
2) Since Kawasaki has a separate plant in India, even if the volumes of Ninja 1000 are not high, they would have wanted to use the local capacity of the plant given that it may share some components with the Ninja 650.
3) IMO, Freight and insurance charges would be much higher for CBU's.

Googly:
This gets a bit more interesting, the rates look to be zero even for importing as CKD from Thailand. Refer the FTA notification shared earlier - S.no 1487- HS codes 871491 to 871496 is mostly parts & accessories of motorcycles.

[riteshritesh]

Attaching a screenshot of HS codes for those interested in co-relating the FTA.

People can search on icegate.gov.in> customs duty calculator> enter the capcha> Trade guide on imports> Enter 2 digits of the HS code and you will get a brief picture.