In the field of automobile exports, in addition to direct transportation of whole vehicles (CBUs), another key mode is widely used, especially for markets with high tariffs or encouraging localized production, which is KD export (Knock Down, assembly of parts). Understanding the KD model is a key step in mastering the overall picture of automobile exports.

What is KD export?
KD export refers to automobile manufacturers not exporting complete vehicles, but packaging them in the form of whole or semi parts, transporting them to assembly factories in the target market's country, and then localizing assembly and sales. According to the degree of loose parts, they are mainly divided into:

CKD: Fully assembled parts. Almost all parts (including screws) are disassembled and boxed for export, and the local factory is equivalent to final assembly.

SKD: Semi assembled parts. Exporting in the form of assemblies or modules (such as installed engines, complete chassis, and body shells) simplifies the local assembly process.

Why choose KD mode?

Avoiding high tariffs: Many countries impose high tariffs (ranging from 25% to 70%) on imported vehicles to protect their local industries and promote employment, but much lower tariffs are imposed on automotive parts. The KD model can significantly reduce the tax cost of the final product.

Meet localization rate policy: countries such as India, Brazil and Türkiye have clear requirements for localization rate of automobile industry. Adopting the KD mode facilitates the gradual introduction of components produced by local suppliers, meets policy requirements, and enjoys discounts.

Reduce logistics costs: Loose items can be packed more tightly, saving a lot of shipping space and reducing unit logistics costs compared to whole vehicle transportation.

Flexible market response: Setting up assembly lines in the target market can quickly respond to localized configurations (such as adjusting suspension and interior materials to adapt to road conditions and preferences).

Challenges and core competencies
The KD mode is not a 'one size fits all' approach. It has put forward higher requirements for host factories: globally unified precision supply chain management (to ensure timely delivery of global spare parts), strict technology output and quality control (to transfer technology and provide personnel training to overseas factories to ensure consistent global quality), and complex production planning and inventory coordination capabilities. A missing screw can cause the entire overseas production line to shut down. Therefore, the KD model is an important manifestation of the internationalization depth and system capability of automotive enterprises.