Knock-down kit
A knock-down kit (also knockdown kit, knocked-down kit, or simply knockdown or KD) is a collection of parts required to assemble a product. The parts are typically manufactured in one country or region, then exported to another country or region for final assembly. A common form of knock-down is a complete knock-down (CKD), which is a kit of entirely unassembled parts of a product. It is also a method of supplying parts to a market, particularly in shipping to foreign nations, and serves as a way of counting or pricing. CKD is a common practice in the automotive, bus, heavy truck, and rail vehicle industries, as well as electronics, furniture and other products. Businesses sell knocked-down kits to their foreign affiliates or licensees for various reasons, including the avoidance of import taxes, to receive tax preferences for providing local manufacturing jobs, or even to be considered as a bidder at all (for example, in public transport projects with "buy national" rules). A semi-knocked-down kit (SKD) or incompletely disassembled kit (although it has never been assembled) is a kit of the partially assembled parts of a product. Both types of KDs, complete and incomplete, are collectively referred to within the auto industry as knocked-down export (KDX), and cars assembled in the country of origin and exported whole to the destination market are known as built-up export (BUX). Technically, the terms "knock-down", "incompletely disassembled kit" and "kits of parts" are all misnomers, because the knock-downs were never built up in the first place, and the shipments of parts are often not in the form of kits, but rather bulk-packed by type of part into shipping containers. The degree of "knock-down" depends on the desires and technical abilities of the receiving organization, or on government import regulations. Developing nations may pursue trade and economic policies that call for import substitution or local content regulations. Companies with CKD operations help the country substitute the finished products it imports with locally assembled substitutes. Knock-down kit assembling plants are less expensive to establish and maintain, because they do not need modern robotic equipment, and the workforce is usually much less expensive in comparison to the home country. The plants may also be effective for low-volume production. The CKD concept allows firms in developing markets to gain expertise in a particular industry. At the same time, the CKD kit exporting company gains new markets that would otherwise be closed. Automotive In the automotive industry, the most basic form of a vehicle in KD kit lacks the wheels, internal combustion engine, transmission, and battery. They are either supplied as parts for assembly (a "complete" kit) or obtained from third parties (an "incomplete" kit); all of the interiors are already installed at the originating factory. The term SKD for semi-knocked-down refers to a kit with a complete, welded car body, usually coated or already painted. To gain some extra tax preferences, the manufacturer needs to further localise the car, i.e. increase the share of parts produced by local manufacturers,