​Understanding CBU/KD/SKD/CKD Export Models in Automotive

1. CBU (Complete Built Unit) – Full Vehicle Export

CBU refers to the export of fully assembled vehicles directly from the manufacturing country to the destination market. This model ensures high-quality control and reliability but incurs higher import tariffs (up to 30.7% in the EU) due to its “complete” status.
Key Features:

• Sold as finished products with warranties and advanced technology;
• No assembly required in the destination country;
• Popular among consumers prioritizing convenience and quality.

​2. CKD (Complete Knocked Down) – Full Disassembled Export

CKD involves shipping unassembled parts (metal stampings, unassembled bodies) to the destination country, where they are welded, painted, and assembled locally. This model requires significant investment in local manufacturing facilities but offers maximum tax incentives.
Key Differences from SKD:

• CKD bodies are in a pre-painted state, while SKD bodies are unpainted sub-assemblies;
• CKD (localization rate) is typically over 80%, with critical components (engines, gearboxes) often sourced locally.

​3. SKD (Semi Knocked Down) – Partially Disassembled Export

SKD exports partially assembled units (e.g., welded bodies, pre-painted cabins) to reduce shipping costs and tariffs. This model balances efficiency with localization, as seen in China’s early export strategies (e.g., Shanghai Santana).
Applications:

• Emerging markets with limited supplier bases;
• Cost savings of up to 40% compared to CBU.

​4. Logistics KD – Specialized Disassembly for Shipping

Defined as the disassembly of vehicles at ports before containerization, involving critical components (cab, rear axle, engine). This variant optimizes logistics but complicates customs clearance.

​Why China Emphasizes KD Models

1. ​Trade Barrier Mitigation: KD avoids EU’s punitive tariffs on CBU imports;
2. ​Cost Efficiency: Shipping costs for KD parts are 30% lower than CBU;
3. ​Industrial Upgrading: Promotes (localization) of supply chains (e.g., ISUZU’s transformation from trade to joint ventures);
4. ​Market Penetration: Enables rapid entry into new markets while adhering to local production requirements.

​Vehicle Export Mode Classification

According to international trade regulations and tariff policies, vehicles are primarily exported in three forms:

1. ​CBU (Complete Built Unit): Vehicles are exported as finished products, subject to high import duties in destination countries.
2. ​SKD (Semi Knocked Down): Core components (engine, chassis) are pre-assembled and exported, with remaining parts shipped separately for local assembly.
3. ​CKD (Complete Knocked Down): All parts are shipped disassembled, requiring local facilities for welding, painting, and final assembly.

​Key Technical Distinctions

• ​CKD vs. SKD: The primary difference lies in the pre-assembly state of the body/cabin. CKD bodies are painted and welded, while SKD bodies are unassembled sub-assemblies.
• ​KD Product Resources: Refers to disassembled vehicle parts structured to meet KD export requirements, with separate BOM (Bill of Materials) versions for domestic validation (S-version) and overseas production (A-version).