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08
2025
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08
Automotive SKD Assembly Project Dynamics and Industry Impact
Recently, the SKD (semi-knocked-down) assembly model in the automotive industry has become a focus of attention. Several SKD assembly projects have made new progress, demonstrating the important role and development potential of this production model in the global automotive industry.
In terms of international cooperation, Xpeng Motors and GAC Group plan to assemble special models using SKD semi-knocked-down kits at Magna Steyr's Graz plant in Austria starting in June this year. This move represents an important strategic move for Chinese automotive brands in the European market.
Currently, Chinese automakers face high tariff pressures from the EU, such as a 20.7% anti-subsidy tariff and a 10% base tariff, with a total tariff rate as high as 30.7%. However, through the SKD assembly model, only import tariffs on parts (usually less than 10%) need to be paid, significantly reducing costs. At the same time, initial small-scale production also helps Chinese automotive brands cautiously explore the European market and reduce risks.
Domestic companies are also actively promoting SKD assembly projects in overseas markets. On 15 June, Shenzhen Wall Gecko New Energy Vehicle Technology Co., Ltd. and China West Africa Green Future New Energy Vehicle (Hangzhou) Co., Ltd. signed a memorandum of understanding to establish an SKD factory. The project will be located in Ghana, Africa, and is the first investment cooperation project by a Chinese new energy vehicle company in Ghana. The Ghanaian government has implemented an eight-year tariff-free policy for imported electric vehicles starting from 2024. The Gecko Automobile SKD factory project will not only benefit from these policy incentives but also drive the development of the local electric vehicle industry.
In addition, the Dongfeng Nissan Venucia VX6 SKD export packaging project was officially shipped on 19 May, with 75 new energy vehicles assembled using a semi-knocked-down (SKD) assembly model exported to Myanmar. From the official launch of the project to container loading and shipment, the entire Dongfeng Nissan value chain overcame numerous challenges to complete all tasks within less than 50 days. To ensure the quality of assembly by the Myanmar side, Dongfeng Nissan also established a training team to conduct a 20-day training programme for Myanmar personnel. Currently, the assembly efficiency and key quality indicator pass rates of the Myanmar side have both met the standards. It is expected that the Venucia VX6 will achieve local assembly and sales by the third quarter of this year. This project has established a replicable and sustainable new export model for Dongfeng Nissan.
The SKD assembly model is of great significance to the development of the automotive industry. For automotive manufacturers, this model reduces transportation costs, eases tariff burdens, and enables flexible responses to market demand changes. Taking the OGB factory of GAC International Nigeria as an example, after adopting the SKD model, assembly precision and quality improved, annual production capacity increased from 2,000 units to 5,000 units, and all models achieved co-line production, effectively enhancing production efficiency and reducing costs.
For importing countries, the SKD model can promote domestic industrial development and increase employment opportunities. For example, Jetour Automobile plans to build a car assembly plant in Batna Province, Algeria, using the SKD production model, which is expected to create 450 jobs in the initial stage.
As the global automotive market continues to evolve, the SKD assembly model will play an increasingly important role in the globalisation of the automotive industry, not only helping automotive companies expand into international markets but also promoting the coordinated development of the automotive industry in various countries.
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