Developing nations may pursue trade and economic policies that call for import substitution or local content regulations. The degree of "knockdown" depends on the desires and technical abilities of the receiving organization or on government import regulations. The terms "knockdown" or "kits of parts" are both misnomers, because the knockdowns 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. Both types of KDs, complete and incomplete, are collectively referred to within the auto industry as KDX (for knocked-down export), and cars assembled in the country of origin and exported whole to the destination market are known as BUX (for built-up export). Businesses sell knocked down kits to their foreign affiliates or licensees for various reasons, including to avoid 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 transit projects with "buy national" rules).Īn incomplete kit is known as SKD for semi-knocked-down. CKD is a common practice within the automotive industry, the bus and heavy truck industry, and the rail vehicle industry, as well as electronics, furniture, and in other products. 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. The parts are typically manufactured in one country or region, then exported to another country or region for final assembly.Ī common form of knock-down is a complete knock-down (CKD), which is a complete kit needed to assemble a product. A knock-down kit is a kit containing the parts needed to assemble a product.
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