- Toyota

Toyota India’s expansion screeches to a halt?

Steep tax slabs for automobiles have forced the Japanese automaker to apply brakes.

What happens when, on one side, you’re trying to attract global players to boost the manufacturing sector, and on the other side, one of the biggest names in the automobile world says “ In the absence of any reforms, we won’t exit India, but we won’t scale up”? The answer is simple – it builds quite an awkward situation for India and the central government.

Shekhar Viswanathan, who is the vice-chairman at Toyota Kirloskar Motor (TKM), says that courtesy of steep tax slabs for automobiles in India, the company has decided to apply brakes on its expansion plans. He went on to state that the high taxes make it hard for companies to build scale. They also put owning a car out of reach of a huge chunk of customers, and that, in turn, idles factories and reduces job creations.

Toyota Camry Hybrid | Toyota Vellfire | Toyota Yaris

Toyota Camry Hybrid | Toyota Vellfire | Toyota Yaris

Viswanathan further added: “The message we are getting, after we have come here and invested money, is that we don’t want you.” Putting an analogy on how high the tax slabs are, he went on to say: “You’d think the auto sector is making drugs or liquor”.

He also said: “Market India always has to precede Factory India, and this is something the politicians and bureaucrats don’t understand. At the slightest sign of a product doing well, they slap it with a higher and higher tax rate.”

Viswanathan is part of a company which began operations in India in 1997. Toyota Motor Corporation, which is one of the largest automobile names in the world, owns 89 per cent of TKM. Data shows that in August 2020, Toyota had a market share of only 2.6 per cent, down from nearly 5 per cent a year ago.

Is he talking sense? All passenger vehicles, including private and commercial, fall under the 28 per cent GST slab. Based on what type of vehicle it is, each one attracts additional cess on top of that. Here’s how the table looks like:

GST Regime

GST Regime

Pure-electric vehicles, or EVs, currently fall in the 5 per cent GST slab.

Story source: Bloomberg

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Comments (12)

  • They are correct about the tax part our tax brackets are one of the highest in the world.

      1 month ago
  • the govt is desperate on money thats why they opened more wine shops than any manufacturing facilities. tata and others should join and protest, may be shut down entire production until something happens. normal is very heavy plus GST that is stupidity. i demand the govt show how much money they stole from the people.

      1 month ago
  • Looks like Toyota went back on the earlier statement and currently in damage control

      1 month ago
  • (Part 1/2)

    Well yes on that tax aspect Govt has to do something which safeguard both Indian as well as foreign Manufacturers

    (not including those commie chinese shit or if they come in the name of other umbrella brand slap the shit out of them on tax front towards those bastards),

    But the statement coming from Toyota is a bit faf because if he was there since 97 onwards tell me one thing apart from Qualis, Innova, Fortuner & Corolla what did he introduced in Indian markets which compete with others, they've always presented their arrogance by pricing it very higher and creating interest among buyers with new so called launches and then cancelling it out altogether,

    Even the Hilux is coming to Indian shores after so much time where the public would get to experience now where as the product is avaliable in other market for decades, not a Good Yaris, no proper meaning of TRD badging with proper Sports and offroad hardware, no new Corolla in the market, and even the new Camary is a stalemate in sales,

    Now they've resorted to rebadging Suzuki cars where a new Toyota product came as Glanza which was a shit rebadged Suzuki Baleno,

    which is a loss for us Indian consumers and a profit for those who'll get rebadged Toyota cars as Suzuki cars, where Toyota is a bit unknown (sort off) and Suzuki Enjoys good marketing as well as sales,

    The GLOBAL JV of both of them is because of their joint developement of the platform for EV and other battery and hydrogen tech,

    But criticism coming from Toyota is a bit off to begin with as those people are criticizing who haven't launched any bespoke Indian market demand vehicle to begin with even after the whole love and appreciation for the product from Indian consumers even after their inflation of price and somewhat their greed also which made their vehicle overpriced and even then these people are criticizing is somewhat of a hypocritical statement because this shows their reluctant of adaptation acc. to the market and theor tax

      1 month ago
    • (Part 2/2)

      Even there wasn't any experiment from Toyota side so if they want to play safe and sober then they shouldn't complain because it is due to their sober stratergy and their market milking stratergy even selling old product at...

      Read more
        1 month ago
    • what all car companies should have done was:: bring all models around the globe to many indian autoshows from big cities to small villages and tell the customers ""forget about pricing and other stuff"" ""do you enjoy this car or that car""....

      Read more
        1 month ago
  • Man India sucks. Period.

      1 month ago

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