Toyota says it won't expand further in India, blames 'we don’t want you' taxes
by Anurag Kotoky
Toyota Motor Corp. won’t expand further in India due to the country’s high taxa re gie, a blow for Prime Minister Narendra Modi, who’s trying to lure global companies to offset the deep economic mise brought on by the coronavir s pandemic.
The go nment keeps taxes on cars and motorbikes so high that companies find it hard to build scale, said Shekar Viswanathan, vice chairman of Toyota’s local unit, Toyota Kirloskar Motor. The high levies also put owning a car out of reach of many consumers, meaning factories are idled and jobs aren’t created, he said.
“The message we are getting, after we have come here and invested money, is that we don’t want you,” Viswanathan said in an interview. In the absence of any reforms, “we won’t et India, but we won’t scale up.”
Toyota, one of the world’s biggest carmakers, began operating in India in 1997. Its local unit is owned 89% by the Japanese company and has a small market share -- just 2.6% in August versus almost 5% a year earlier, Federation of Automobile Dealers Associations data show.
In India, motor vehicles including cars, two-wheelers and sports utility vehicles (although not ric vehicles), attract taxes as high as 28%. On top of that there can be additional levies, ranging from 1% to as much as 22%, based on a car’s type, length or engine size. The tax on a four-meter long SUV with an engine capacity of more than 1500 cc works out to be as high as 50%.
The additional levies are typically imposed on what are considered to be “luxury” goods. As well as cars, in India that can include cigarettes and sparkling water.
India is planning to offer incentives worth $23 billion to attract firms to set up manufacturing, people familiar with the matter said last week, including production-linked breaks for automakers. International automakers have struggled to expand in the world’s fourth-biggest car market.
General Motors Co. quit the country in 2017 while Ford Motor Co. agreed last year to move most of its assets in India into a joint venture with Mahindra & Mahindra Ltd. after struggling for more than two decades to win over buyers. That effectively ended independent operations in a country Ford had once said it wanted to be one of its top three markets by 2020.
Such punitive taxes discourage foreign investment, erode automakers’ margins and make the cost of launching new products “prohibitive,” Viswanathan said.
“You’d think the auto sector is making drugs or liquor,” he said. Toyota, which also has an alliance with Suzuki Motor Corp. to sell some of Suzuki’s compact cars under its own brand, is currently utilizing just about 20% of its capacity in a second plant in India.
Taxes on ric vehicles, currently 5%, will probably also go up once sales increase, Viswanathan said, referring to what he says has become a pattern with successive go nments in India.
While discussions are ongoing between ministries for a reduction in taxes, there may not any immediate agreement on an actual cut, India’s Heavy Industries Minister Prakash Javadekar said earlier this month.
译文来源：三泰虎 http://www.santaihu.com/p/50825.html 译者：Jessica.Wu
What Toyata needs to understand is their models are not in the middle class buy category cars. Can be classified as luxury cars. So tax will be high. In India only 2.5% of population pays taxes . The rest 97.5% live on it. Particularly about 70% of the poor live on freebies like free ration etc.. So India is a different country unlike Japan or USA.
In , the go nment reduces the tax to attract foreign capital to improve the economy.In India, the Go nment always think about themselves(riches and po iticians)..
Toyota is too big to be fleble to manufacture cars to the requirement of Indians, they are same like American car companies who have failed to make an impact in Indian market. Let them pack off we will have our own desi companies to take care of our needs. Be Indian buy Indian.
The 28% GST on cars is a dampne.Go nment should bring down the tax structure and make cars affordable for the masses. This will definitely boost car sales and improve the overall economy and the recovery. Increased car sales are an indicator of a fast growing economy.
Indian indutry is living in 1900. Only in 1900 were cars considered a luxury.
While it is to have standard taxes of 20-30%. This is time for india to build strong partnership with US, Europe and Japan and the tax should be capped at 25% - all inclusive. India should encourage healthy competition with foreign countries otherwise you will get Kerosene "made in India" cars.
Agree with Toyota on taxes here.
Tax Te rorm ...no wonder all investors are flocking to Vietnam & Thailand
What a joke, when taxes are reducing,
Toyoto did not bring its good models in Indian markets. Their business model in India is flawed.
It is like killing a Golden goose.How can they attract New foreign investments, Which they need badly.
BYE BYE TOYOTA. GOOD FOR SUZUKI, HYUNDAI, TATA, KIA, ETC....
If only a few can afford a car, as the article itself acknowledges, then why the fuss ? Focus on domestic needs and infrastructure.
The main issue is not enough people are paying taxes. So go nments are left with no option but to milk the easy to catch taxpayers. Sried and big industries can't escape so they are taxed heavily. I think Indian society gives too much respect to people who get away from paying taxes. They are considered smart!! And there lies the problem. Go nment has to catch the tax evaders, punish them heavily and shame them ; that is the only way forward.
India can never progress unless it manages to collect tax from 50% of people and business. A lot of our infrastructure is even worse than poor African countries.
hari krishna Johri
The post of Income Tax Officer is very lucrative in India.
Modi govt's policies are destroying India. Forget foreign investors due to exorbitant taxes.
India is country of beggars, here Car is considered as luxury, Even Maruti 800 has so many taxes:
- Cars has minimum 28% GST, more for imported one.
- Car has registration and road tax.
- One liter petrol has 150% taxes.
- Toll Rs 3 per KM.