
Skoda Auto India has put a pause on importing fully built petrol, diesel, and electric vehicles into the country, as it waits for clarity on customs duties. The Czech carmaker has also delayed plans to locally manufacture electric vehicles until the Indian government finalises fuel efficiency rules under CAFE 3 (Corporate Average Fuel Efficiency).
Skoda Enyaq EV and Diesel Models Put on Hold
Skoda was preparing to introduce several premium models in India through the CBU (completely built unit) route. This included the Enyaq electric SUV, along with diesel variants of the Superb, Octavia, Octavia RS, and the new Kodiaq.
However, all these plans are now on hold due to uncertainty around customs tariffs.
“We are not sure whether under the current conditions when the customs duty is a question mark, and in all likelihood, it will see a downward revision, whether it makes sense to get a CBU,” said Petr Janeba, Brand Director at Skoda Auto India. “There will be a resolution on customs duty within the next three months. We can then consider an EV introduction from Skoda this year.”
Local EV Plans Deferred, Diesel Re-Entry Still On
Janeba confirmed that Skoda has postponed its local EV manufacturing plans due to the pending CAFE 3 guidelines. However, he also said that Skoda is committed to reintroducing diesel models as part of its premium lineup.
Skoda currently sells Kushaq and Slavia—both locally produced models—under its India 2.0 strategy, which focuses on localisation.
Skoda Banking on EU-India Free Trade Agreement
Skoda Auto India is hopeful that a possible Free Trade Agreement (FTA) between India and the European Union could bring down import duties and make CBU imports more practical. India currently imposes 110% customs duty on fully built vehicles priced above $40,000 and 70% on those below that mark.
The proposed FTA with the EU—expected to be finalised by the end of the year—could significantly reduce these tariffs. The EU is seeking lower duties on cars, wine, and whiskey, while India wants better access for exports like pharmaceuticals, textiles, and apparel. A bilateral deal with the United States is also being closely watched, as it could impact future import decisions.
CBU Imports Not a Volume Game for Most Carmakers
Most European brands in India, including Mercedes-Benz and BMW, import just 5% of their total portfolio. They locally assemble around 90% of their offerings, meaning that an FTA may not drastically change their strategy.
Still, for companies like Skoda looking to bring niche or premium models, reduced customs duties could open new opportunities.
Source – The Economic Times