Is CBU (fully imported) really better than CKD (locally assembled? Let's discuss

Malaysian consumers have a long-standing (and weird) obsession with the “made in” stickers on their vehicles. Seemingly thinking that fully imported (CBU) models are of higher quality than locally assembled (CKD) products.

This is an unjust misconception and undermines the expertise of our local talents who are equally qualified to assemble cars that meet the manufacturers stringent global manufacturing standards.

What Are CBU and CKD?

CBU (Completely Built-Up) refers to cars that are assembled in a foreign country and are subsequently imported into the local market as a complete, operable vehicle. However, fully imported cars are slapped on with heavy excise duties (between 60 - 105%) that skyrockets the final selling price. 

CKD is short for Completely Knocked Down, referring to cars that were put together at a local manufacturing facility. Usually, high-volume models will be locally assembled which will then qualify for the Government’s CKD incentives and exemptions on excise duties which means, cheaper car price for Malaysians.

Brands With CKD Operations In Malaysia

These are the brands that operate a manufacturing plant and assembles vehicles in the country:

Is CBU Better Than CKD?

Most definitely not. You see, setting up a manufacturing plant is not as simple as getting a factory space, acquire some machines and start churning out cars by the thousands.

Each and every factory, no matter where they’re located, will have to adhere to the global production standards. Meaning each car will have to be of a certain quality set by the principal which is why every car that leaves the production floor will have to go through strict quality checks.

Malaysian-assembled cars are also being exported to foreign countries such as the Perodua Myvi to Singapore, MINI Countryman S to Thailand, Mercedes-Benz C 180 to the Philippines and the Mazda CX-5 to Indonesia, Thailand and Philippines.

The Naza Automotive Manufacturing facility in Gurun is Groupe PSA’s regional manufacturing hub for the ASEAN region. At the moment, the plant exports the Peugeot 3008 to Vietnam. Volvo Car Malaysia also exports Volvo models assembled in Shah Alam to Indonesia, Philippines, Taiwan, Thailand and Vietnam. 

These are testaments and assurance to the production capabilities of Anak Malaysia and quality of cars assembled in Malaysia.

Sometimes, CKD Is Better Than CBU

Often times, a locally assembled car, depending on the local content, qualifies for incentives and tax breaks from the Government. The savings are then passed on to the consumers in the form of better equipment or simply by lowering the car price.

One example is the Mercedes-AMG C 43 sedan. When it was first introduced as a CBU unit, it had an asking price of RM 499,888 but is now priced at RM 421,888 when it's assembling at Mercedes-Benz Malaysia's plant in Pekan – a significant savings of RM 78,000.

Another benefit of having CKD operation is the parts availability when it comes to replacement. Replacement parts will be more readily available as the parts centre will be able to source from local vendors who are already supplying to the manufacturing plants.

In some cases, the parts used in CKD cars may actually be better than CBU ones. Locally-assembled BMWs, for example, has a different cooling system and rubber components from imported/reconditioned models. The local cars benefit from a different 'hot climate package' specifications components.

The previous Toyota Camry Hybrid (current all-new model no longer offered as a hybrid) was locally-assembled and had its hybrid battery adapted to local driving conditions, improvements which the fully-imported Prius didn't have. 

In short, the country of origin shouldn’t be a deciding factor for your next car purchase. Whether is it CKD or CBU, neither one has a significant advantage over the other. If anything, you are getting more bang for your buck with a CKD car.