Perturbed by the new definition of CKD (completely knocked down) units and the consequent changes to the tariff structure that will be applicable to the assembly of such units as announced in the Budget, Audi feels that it could be forced to look at a scaled down level of expectation from the Indian market if the new norms are going to detrimental to its business case.

Speaking to Business Line here, Mr Peter Schwarzenbauer, Member of the Board of Management of Audi AG for Marketing and Sales, said that the new higher tariffs for import and assembly of CKD units could alter the business case for Audi, since it is not easy to do assembly operations for a market like India, where volumes are low. We may have to consider every possibility including scaling back operations or investments and wait to see when the impact of such legislation might be reversed.

“Right now we need some more time since we are trying to analyse the meaning and impact of the CKD definition. We have to understand the fine print of all these kinds of legislation,” he said. The Government has to consider changes to the law based on a long-term goal or strategy — if the plan is to get some short term benefits it is fine, but if it wants to adopt a long-term strategy to promote exports and a uniform tariff strategy, then this change will be detrimental, felt Mr Schwarzenbauer.

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