KD (KNOCK DOWN)
It refers to the method to export parts instead of finished goods by assembling them locally and selling the products. This method is often used to export automobiles to developing countries.
It is easy for developing countries to adopt this method as it contributes more to industrialization, including employment expansion as KNOCK DOWN or acquisition of assembly technology, etc., rather than importing finished goods. It costs cheaper customs duty for exporting countries compared to exporting finished goods, and cheap local labor can be provided.
Types of KD
- CKD(COMPLETE KNOCK DOWN)
- An exporting country packs all the raw materials needed to assemble a vehicle as individual parts of the smallest unit and exports the parts. An importing country assembles vehicles in an automobile factory and sells them.
- SKD(SEMI KNOCK DOWN)
- An exporting country packs more parts than CKD ones needed to assemble vehicles and exports them. An importing country doesn’t have a chassis or a painting factory. Assembled parts with finished painting work and local procurement parts are supplied locally to assemble vehicles.
- DKD(DISASSEMBLY KNOCK DOWN)
- After manufacturing vehicles in an exporting country, they are disassembled and packed as semi-assembled parts and then exported. An importing country reassemble the parts in a relatively simple way to manufacture vehicles in assembly lines.
KD Participation Results – ASSEMBLY LINE DESIGN & ENGINEERING
- Hyundai Motor Company : HMMA, HMMC, HMMR
- Kia Motors Corporation : KMS
- Vietnam : THACO-KIA Motors
- Malaysia : NAZA, INOKOM, GO AUTO, PROTON
- Iran : SAIPA
- Ecuador : AYMESA
- India : FIAT INDIA, GM INDIA
- Russia : AVTOTOR, SOLLERS