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Old 17th September 2020, 15:23   #166
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Is Toyota going by this logic “Crying baby gets more milk”? I’m surprised A+ rated company is talking like a new comer who failed to impress the crowd.

Their approach is more or less similar to that of other Japanese companies in India to the likes of Suzuki, Nissan, Honda who are proving to be lethargic in their approach Vs newcomers like Kia who’s setting example after one another.

Toyota had good cars in their line up overseas. Why not bring one good looking car and see how it performs and then quantify their statement if it fails? This is basically all talks no action types, boss. Grow up, Toyota!

If there’s a nice car, Indians don’t really care about the premium they’re paying - take Seltos, Creta for example in crossover segment. They’ve set a strong example side by side despite having premium over other cars and they justify with strong network which you’ve and the segment rich features and wide range of engine and gear box combos it comes with. Follow something like this!
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Old 17th September 2020, 15:26   #167
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Toyota's U-TURN was faster than a auto wala. Anyways Toyota always overpriced their cars in India. From what I have heard, Indian made Toyotas are sold at a cheaper price in other countries and are priced high in India. I did not understand why. Maybe because of the mass following Toyota has or maybe because they had only one well established car in their portfolio that politicians love and wouldn't mind paying heavily for that.
IMHO Toyota isn't doing great in terms of sales that they need to think of expansion. They can re-badge a couple of Maruti cars and fillup their tummy.
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Old 17th September 2020, 15:41   #168
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Here are the pertinent questions on the 'too much tax' argument:

1) Are we (and the auto makers) paying too much tax on our cars? Yes.

2) Is there a need to re-think cars as luxury items? Yes.

3) Will that change anytime soon? Probably Not.

We could go on about how much tax we pay or just pay them and get on with it or approach the courts with our grievances. Tax reform, like many things, is a long drawn out saga in India.

Now lets put Toyota's argument to the test:

1) Have they made tons of money selling outdated (Qualis, Etios, Liva), yet supremely efficient cars in India, essentially shipping fully depreciated machinery from other markets to make those cars in India? Yes.

2) Do they come across as dishing out the step motherly treatment to the Indian market? (plonking a severely under powered 1.4 diesel in a Corolla, re-badging Marutis, selling defunct products, not making the effort to engineer a car specifically for India, no products in key segments) Yes.

3) Do they have the wherewithal to setup the infrastructure for, engineer and market India-specific cars? Yes.

4) Does the Toyota badge resonate with the Indian car buyer? Yes.

If you look at it objectively, it does look like a case of sour grapes from Toyota and/or its executives. The thing about doing business in India is that, no matter who you are - from a sole proprietor corner shop owner to a Fortune-500 MNC, you have got to be prepared to thrive in the chaotic external environment that is the Indian market. Policy flip flops, delays, antiquated legislation, slow adoption of reforms etc are as much part of the Indian experience as curry and cricket. The rewards are there to be had for those who see this as an opportunity and not a hindrance.

Coming back to Toyota, I find it incredulous that they have not milked the brand value they still enjoy in India. Why are they not present in segments that are begging for disruption? Why are they acting like the perpetual late movers and not like the pioneers that they are in other markets?

I have lived in Southeast Asia for may years now and I get the impression that Toyota is more interested (and invested) in those markets, going by the vast product portfolio and latest offerings (despite a higher tax structure for automobiles, in some cases). So their argument simply does not really cut it, I'm afraid. And the desperate attempt at retracting the earlier statement made by their executive is not helping matters either.

Pull up your socks Toyota!
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Old 17th September 2020, 16:03   #169
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Taxes are undoubtedly high in India, but it's the same for all - innovation and adaptation are key, look at Kia - they've brought in the Seltos with several class leading features, and it's been a runaway hit and their new mini SUV too seems destined for great success.

I'm a Toyota Fan, having owned the Qualis, Gen 1 Fortuner and Innova and now a Gen 2 Fortuner - these are all bullet proof cars but look at the garbage they gave us with the Made for India Etios? I still can't believe that Toyota could engineer something so poor, it deserved to be a sales disaster.

I wish Taxation would reduce across the board, but I doubt if that will ever happen.
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Old 17th September 2020, 16:52   #170
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Originally Posted by GTO View Post

If Maruti or Hyundai were to make such statements, I would put more weight on them. But coming from an organisation that has been absolutely LAZY in India,
Completely agree with You @GTO. They have been lazy even with the couple of Horses that they launched in India. In terms of features, Toyotas are the most ill-equiped in their respective segments. The showroom guys say as if its a metter of pride for them "Sir If You are looking for features, look elsewhere, don't buy a Toyota". Agree that the reliability is unmatched, but can that alone be used as an excuse to sacrifice all other factors??

I rather appreciate the efforts Tata and Mahindra take in getting their feature list upto speed with the International manufacturers.
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Old 17th September 2020, 17:34   #171
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Originally Posted by imp! View Post
They may have given India the Qualis, Innova and Fortuner, but, they also only ever offered sub standard and/or over priced products for the rest of the range, and, truth be told, I really don't think the Innova or Fortuner are worth the amount the ask for them either. They really have not released relevant products for the market. They've shot themselves in the foot with their arrogance.
Looks like the case of grapes are sour !!!

The pricing of Innova Crysta was just not right. There has to be to leverage your brand name to command a price premium. Arrogance at its best. And that too in a price conscious market like India.

The world's largest car manufacturer was able to crack the US market but not the India Market. Look at Tatas and Mahindras, they are fighting for market share in each segment with all their might, under the same laws even when they don't have the same level of international standing as Toyota.

Last edited by Sheel : 18th September 2020 at 09:13. Reason: sore = sour.
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Old 17th September 2020, 20:02   #172
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Here's the detailed answer from the ministry.

Looks this has more to do with Royalties that TKM or Suzuki India pays to their parent company.

And this sums up the position.

"However, India saw new players in Jeep, MG Motors, Kia and few other making inroads. Some of the incumbents felt pressure while others like Maruti and Hyundai continued their progress. Certain segments did not do well. One such case is that of hybrid vehicles with large variants from mild to strong hybrids. As quick transition was happening towards electric vehicle, there were few takers in India for hybrid vehicles. Their cost also contributed to consumer not making a choice for hybrid," said people familiar with the matter.
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Old 17th September 2020, 20:26   #173
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Pushback from GoI:
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Old 17th September 2020, 21:15   #174
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Originally Posted by Turbanator View Post
Their cost also contributed to consumer not making a choice for hybrid
My attempt of translating the above statement into layman words -

"Maruti Suzuki can offer Ciaz SHVS with marginal premium over it's ICE sibling allowing it to improve sales figures whereas Toyota brought astronomically priced Hybrid cars to India keeping them out of reach for majority of consumers."

Hybrids could have had a big market in India. The Honda Civic Hybrid back in 2008 did garner a lot of attention however the spare part availability and lengthy delays for procuring the same proved to be a major deterrent.

Toyata Hybrids simply overshot the price by a big margin.

We can say that Maruti SHVS although not a pure Hybrid system shows that Indian market could have and still can accept Hybrids provided they are reasonable.
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Old 17th September 2020, 22:30   #175
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I remember when they launched Etios as a car made in India for India. When a reporter asked them about the surveys they did in India they said Indians drink a lot of water so we have lots of cubby holes to store water. That was the only answer I remember. They kept going back to the water storage areas for a car that looked like it landed from the past. They just expected people to line up because toyota was doing everyone a favour by launching a car in the India market.
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Old 17th September 2020, 22:36   #176
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes


I think there were some benefits on the VAT/ Excise on such Hybrids that Maruti and Mahindra launched. Wrong use, someone should ask them to pay up for past. No use of comparing such fake hybrids with true hybrids.
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Old 17th September 2020, 22:59   #177
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Although taxes on cars in India are relatively high (they are indeed very high on fuel, especially petrol), I vehemently oppose any GST cut on automobiles! Except maybe for electric vehicle components (EVs already attract only a 5% GST).

If at all a tax cut needs to take place, it should be an income tax cut for individuals! Corporates have already got their IT rates reduced quite recently.

The Chinese coronavirus pandemic has hit the income of the middle class hard. And it's the income tax paying middle class individuals who have held this Third World country on their hard-working shoulders since the 1947 power transfer (& maybe even before that). Not to mention, the mass-market volume cars are bought by the middle class only.

A GST cut will only benefit the greedy carmakers (like Toyota) who will initially cut the price and tomtom it through their stooges among the mainstream media morons, but sneakily raise it back to previous levels or even more within one year citing "rising input costs" and the "depreciating rupee", even if the ₹ manages to appreciate by a few units against the $.

An income tax cut, on the other hand, will put some much needed money in the hands of the hard hit middle class, who have lost their jobs or have had their wages reduced significantly. Whether they choose to use it on essentials & unavoidables (like food, clothing, shelter, existing debt, medical & educational expenses) or spend it on discretionary items like cars and bikes should be upto them only.

Only if money is in the hands of consumers can a consumer-driven economy thrive, and not by cutting taxes on certain specific goods. By the way, why should the GST be reduced only on automobiles? Why not on mobile phones & computers? Why not on refrigerators & air-conditioners? Why not on apartments & flats? What's so special about the auto sector that other equally deserving sectors don't deserve? If GST on autos is cut, will other sectors also not start demanding GST cuts one by one???

A GST cut on specific products is NOT the way to increase the GDP growth in a consumer society. It can be done only by putting money in the hands of consumers, and ONLY an IT cut for individuals can achieve that!

Just because individuals don't have a voice in this Third World country, industrial sector lobbies (like the auto lobby SIAM) use their stooges among the mainstream media morons to get all the benefits for themselves!

This seemingly "sudden" outburst by Mr. Viswanathan is nothing but a carefully planned pre-meditated pressure tactic by a greedy company that has failed to read the market, has failed to innovate, and has failed to respect the Indian consumer! Just because XYZ happens to be the world's largest or second largest auto company doesn't mean Indians have to buy whatever highly overpriced, grossly under-specced, technologically stale products XYZ throws at the consumers.

A "Toyota tax" on intelligent consumers can only work as long as there are no options. Once there are enough equally good or superior options for the consumer, the "Toyota tax" will, and should turn into a noose around the company's neck that should strangle it. This is what is happening now. Even a child who knows his/her cars should have seen this coming for this incredibly racist, arrogant and lethargic company!

Cry all you want and shout till your voice goes hoarse, Toyota! You don't deserve a GST cut at all. It's the middle class taxpayers who need and more importantly, deserve an IT cut!

Last edited by RSR : 17th September 2020 at 23:23.
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Old 18th September 2020, 00:19   #178
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Taxation is indeed very high in India, and many feel that they don't get any real benefits of paying those taxes, unlike in other countries. We, tax paying individuals feel the pinch too, but we take it in our stride, mostly because there's not much we can do to avoid taxes.

For a large corporation like Toyota, sure they'd like it if their products are in a lower tax slab and more affordable to the customers. But, every single penny that they pay is charged to us consumers. So, why so much noise now? Did the taxes rise significantly since when they entered the Indian market? No !!!

Quote: The government 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 exit India, but we won’t scale up.”

IF this was true, what prevents Toyota from launching cars for disabled people or electric vehicles? The GST on those is 5%. Won't they be affordable since the tax on them is so low?

I think its clear that Viswanathan is making a hue and cry because Toyota is hit by the royalty issue, the Covid slowdown, and the BS6 norms. I also think that he may have bitten off more than he can chew. These statements will likely haunt him.
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Old 18th September 2020, 00:27   #179
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Originally Posted by GTO View Post
Toyota never brought its latest hatchbacks, sedans & crossovers here (despite a boom in crossovers), nor its latest technologies to the volume segments. Heck, they were selling a 1.4L diesel in a 20-lakh car! But my real question is, should Toyota be disappointed with India or should India be disappointed with Toyota? As someone who reasonably understands the automotive scene, I have to go with the latter. If Vishwanathan wants to know the meaning of "aggressive investment", he should probably look at a newcomer like Kia.
Well summed up! They spent more than a billion on the Hydrogen fuel cell technology, infra and the Mirai in the US. For that money, they could have at least setup a R&D division here to bring some of their concepts like BEV or iDrive to India. They would have been ideal urban commuters for folks who prefer a car like ride.
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Old 18th September 2020, 00:44   #180
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Originally Posted by GTO View Post
Toyota never brought its latest hatchbacks, sedans & crossovers here (despite a boom in crossovers)
I beg to differ on that one. Yes, Toyota has not brought cars from its international line up in india but same can be said about Kia.
The Seltos, even though it is a great car, is simply a heavily modified Creta and the difference between these two cars isn't day and night (if you ignore styling). The next main car it is going to launch is Sonet, which is again a heavily modified Hyundai car, forgetting that it has the Soul in its international portfolio. Carnival just couldn't deliver on our hopes mainly because of its price, even after being assembled here in India and this is going to impact Kia's future decisions. There may be news of Kia evaluating Stringer and Sorento for India but so is there news of Toyota evaluating Hilux and other cars for India. Kia's budget cars which can actually sell in India are not even in the news.

A rather intriguing fact is that Kia 'builds' and sells its international cars like Picanto and Sportage in Pakistan where their equivalent Hyundai products are not on sale. I don't know anything about our neighbour's car scene but considering its economic state, I can't guess how it's more profitable than building and selling these vehicles in India. We can forget about Kia, even Suzuki sells its Alto Works in Pakistan.

I have simply drawn the conclusion that in India you need tailor made cars for India to taste real success and these cars won't sell that well anywhere else. Have a look at Venue's US sales compared to Ecosport.

I seriously hope some manufacturer will prove me wrong some day.
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