The three major models of automobile export are essentially the deepening of product form and value-from selling complete vehicles to selling parts to selling factories.

a picture to understand

Dismantling core differences

1. CBU -Trade Export

Build the car domestically and ship it directly. Zero local investment, but facing the highest tariff barriers. Testing periods suitable for new markets, or scenarios where the target country does not have an automotive industry protection policy.

The process is the simplest, and product quality is completely controlled by domestic factories

Tariffs eat up profits, which is where the risk lies. Once policies change, sales will be directly lost. Several countries will increase barriers to CBU in 2026.

2. SKD -Semi-assembled Export

Disassemble and export the large assembly (powertrain, chassis, and body) after the body has been welded and painted, and then use simple tooling to tighten the bolts and install the tires and seats locally. The essence is to move the last final assembly process overseas.

- Advantages: tariffs are greatly reduced (the tax rates for SKD and CKD in most countries are similar), and investment can still be controlled (there is no need to build a welding and coating workshop)

- Limitations, the driving force on local industries is relatively limited, and some countries have begun to tighten SKD qualifications

3. CKD -Factory Export

All parts and components are exported in bulk, and the entire process of welding → painting → final assembly ** is completed locally. This is no longer selling cars, but exporting manufacturing capabilities.

Advantages, the lowest import tax rate, you can enjoy local industrial policies (land and tax incentives), and you can also be deeply tied to the local government and employment situation.

The threshold is to build a factory, train workers, and establish a supply chain. It takes at least 18 to 24 months from project establishment to production.

Practical judgment logic

Choose a model instead of emotions, look at three things

1. Market size, in markets where less than 5000 units are sold a year, just use CBU, and don't touch CKD.

2. Tariff gap: If the CBU tariff is less than 15% higher than CKD, it will not be counted as the economic account of the factory.

3. Policy certainty: Does the target country have clear automobile industry policies? Yes, just follow CKD-first come, first served, and those who come later may not be qualified

Summary in one sentence: CBU is testing the water, SKD is transition, and CKD is taking root. The essence of the evolution from trader to brand owner is the path from CBU to CKD.

Source: Xiong Yu, digital automobile export

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