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Old 18th September 2020, 04:23   #181
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Default Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by YD14 View Post
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..

Please remember you are comparing a 2 year old brand (Kia) with a 20 year old Indian presence (Toyota).

Kia s second launch was a massively premium MUV sitting above the Innova. That was ballsy!! With all of its global MUV / SUV models, Toyota has been peddling the same industrial Innova / fortuner combo stinkingly overpriced.

I am fine with the badge shared crossover twins. Even in its platform sharing they have created unique differentiations giving the customer greater choice. And while there may be component sharing efficiencies, Hyundai and Kia are clearly slogging it out locally competing here with each other - the winner with such competition to my mind is the customer.

Toyota on the other hand is re badging Maruti products and selling them to us. With honestly far lesser effort in creating a unique product other than literally a mere re badge. Look at a glanza and Baleno and then compare the creta and seltos , and please tell me who is doing this market a disservice when you consider how distinct each set of twins are from each other.
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Old 18th September 2020, 08:09   #182
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Poor Mr. Vishwanathan. It is obvious the topmost honchos fired some trial shots using his shoulders as a steady. Now that it has generally boomeranged on them I wonder what will happen to the shoulder guy.
He is too senior, and TKML too small an operation, to be put in charge of "Gardening & Housekeeping". My guess is he will be kicked upstairs, to head operations of some large territory - my guess is Sahel Africa or South America.
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Old 18th September 2020, 08:35   #183
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I feel both Government and Toyota are equally to blame here.

Government for keeping ridiculous rules such as sub 4 meters tax rates etc, so if global players have to take advantage they have to build something from ground up or do some hacks like XUV300 (bumper chopping). This results in global brands been reluctant to bring their best of the global offerings.

Toyota on the other hand by not really committing to Indian market with their vast resources and engineering prowess should not complain when other companies bring their A game (Kia). When new entrants generate more hype and better response, you definitely know that you are doing something wrong and not reading the pulse of market correctly. They are definitely do everything right in after sales department (else why on earth would anyone buy a sticker job like glanza), if only the price their vehicles more competitively and bring more offerings.
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Old 18th September 2020, 08:55   #184
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

My two cents on the subject.

1. The rant may have been to cover up the inability to achieve their stated target of 10% market share and shift the blame on government policies
2. Having been part of Toyota a long time ago, the reason for them to not bring a lot of cars from the international portfolio to India is their sharp focus on profitability. On multiple occasions, decisions on small car introductions were shelved after detailed research citing the challenge in achieving the ‘Target Profitability’
3. I personally feel that their cars are overpriced for the features and benefits they offer, be it Fortuner, Innova or Yaris.
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Old 18th September 2020, 09:03   #185
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Unlikely to land on our shores. This time around, its Suzuki's version of the Corolla.

https://auto.hindustantimes.com/auto...328505386.html
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Old 18th September 2020, 12:32   #186
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

The likes of Toyota, GM, Ford keep talking of taxes as if they are the only ones impacted and the tax is levied on companies rather than industry segments. The playing field is level and every company in the industry will feel a similar pain.
What will differentiate the moaners from the acceptors will be the reaction. Companies who accept the government policies, work with their suppliers and R&D teams to deliver within the parameters of the government rules will survive and thrive, the others will languish.

India was placed 5th in car sales in 2019. If that doesn't excite the big brands, it is on them that they don't succeed.


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Old 18th September 2020, 13:07   #187
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I agree many expected a reduction of the 28% peak rate. It has not happened. One can blame Covid for it. On the other hand some of our silly laws like 4m and 1400/1200cc are now dinosaurs.

In any case Toyota have never been happy! They want to sell bigger cars only. More profit margins!!
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Old 18th September 2020, 13:58   #188
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Continuing with my earlier post, I want to emphasize on the affordability of cars. As several members put it rightly, overall Indians are not buying enough cars.

What Toyota triggered the debate by saying excessive taxes, need to be understood in larger perspective. As a few of the members already pointed out, we have hardly seen any growth in car buying in the last 10 years or so. Even then, the sales of sub 4M cars dominate and the leading car manufacturer of the country dominate that segment; this implies that sales of medium sized cars or cars costing more than 10 lakhs are shrinking. Quality and safety of these sub 4M cars is a topic for another session. We don't have the critical volume of cars to reap the benefits of scale to have competitive prices - be it service, repair, insurance etc.

I was looking at prices of cars in other markets. Found that top end Fortuner in Indonesia is about 35 Lakhs equivalent Indian rupees, with a slight variation across cities. Whereas in India top end is between 40-43 Lakhs! Similar significant disparities for Honda city when compared to Thailand and India! This means that even if the GoI reduces the tax for medium size cars by 10%. I doubt if the sales can pickup. In any case, tax reduction at present Covid times is out of question. So the affordability has been an issue for many years. Covid only exacerbated the issue.

We may take sides and keep arguing for and against the Automakers. Basic fact remains that out of the 3 Biggest automakers in the world - GM has left the country; Volkswagen barely surviving and Toyota is trying to figure out what to do. This doesn't augur well for the country as a whole.

Regarding the Royalty angle - not sure GoI should be talking about it. Any product development costs money and in the case of automobiles it is multi years effort. These products weren't developed in India. If it had been done outside the country, it is natural that royalty is being paid. Besides, consider the above example of the cost of Fortuner in Indonesia. I am sure there too Royalty is being paid since Fortuner is not developed in Indonesia and costs are way lower than India.

Forget cars - even owning a decent smartphone and laptop is quite hard for an Indian. Don't believe me? Please listen to those children struggling to join online classes. Even the reasonably affordable class find it difficult to provide laptops if they have 2 or more children attending online classes during these Covid days. A 300-330 US$ laptop outside the country here costs about 35K-40K! Another case of high taxes; because these are luxury goods. Yet we want to become IT superpower!

It's the past inaction and excess taxing catching up now. For years we have been told that we are 1.3 Billion strong population and will become super power and economic power house by virtue of demographic dividend. The way things are, time is not too far for it to turn out to demographic disaster. We need to have increased consumption that can increase productivity. Automobiles play a major role. Laptops and smartphones with affordable and reliable bandwidth too has the potential to increase the productivity.

To conclude excess tax is the main culprit and that has been the case since many years. Nothing has changed. Automobile sector yelled first and there are efforts underway to silence them. Fact of the matter is every possible sector has this issue. As someone said - no country in the world has grown by taxing excessively.

Lastly, coming back to the tax concession angle - there are other sectors need that benefit more than Autosector, for example Hospitality sectors(small/medium Hotels ad Restaurants). What is needed is a long term stable policy on automobiles. The major players should be taken into confidence about the policy roadmap for a given time frame and stick to it largely.

Last edited by Sheel : 19th September 2020 at 09:05. Reason: Typos.
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Old 18th September 2020, 14:47   #189
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

My 2 cents...
The fact that Kia or Hyundai are successful with the same tax regime doesn't tell the full story. Toyota probably hasn't reached economies of scale in any of their cars other than innova. I wouldn't be surprised if they had poor margins even on the fortuner. Yaris cannot compete with City/Verna/Ciaz because it hasn't scaled up. They need a winning car that can sell at scale, but they have to invest in a new production line - a problem that can quickly degenerate to a situation where they shut shop.
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Old 18th September 2020, 15:16   #190
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I think it is imperative that we listen to what Toyota has to say.

There is a form of logical fallacy called Ad Hominem or attack the person and not the argument. Regardless of whether Toyota has launched several cars or not, whether their cars are successful or not, whether they are affordable or not and whether they are badge engineered or not, they are a reasonably significant player in our industry. It is a free market. Toyota can sell whatever they want. We must listen and we must act based on the merit of what's being said and not who is saying it.

The points being raised are extremely valid. The tax rates are extremely high for a country with abysmal public transport. There have been insurance policy changes. There has been a completely absurd TCS on cars beyond a certain price. And there have been extremely short-sighted specification of taxes based on car lengths and ground clearances. If you were a neutral observer, you would not be amiss in concluding that India is a basket case when it comes to automobile policy and taxation.

Whether other companies are succeeding and Toyota isn't is not relevant. Those who are succeeding are doing so despite the system. Everyone including the leaders, Toyota and the poor beaten down consumer gets a tremendous boost if the taxation is simplified and made consistent.

On a side note which is slightly . We should welcome candid criticism. Businesses in India have been terrified of criticising policy as they know the power that any elected Government can wield. Let us have more of the likes of Shekhar Vishwanathan who aren't afraid to call a spade a spade.
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Old 18th September 2020, 17:38   #191
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by sramanat View Post
My 2 cents...
The fact that Kia or Hyundai are successful with the same tax regime doesn't tell the full story. Toyota probably hasn't reached economies of scale in any of their cars other than innova. I wouldn't be surprised if they had poor margins even on the fortuner. Yaris cannot compete with City/Verna/Ciaz because it hasn't scaled up. They need a winning car that can sell at scale, but they have to invest in a new production line - a problem that can quickly degenerate to a situation where they shut shop.
Okay, for what exactly?

In a market which eats up anything that's even slightly jacked up, Toyota sells exactly- let me check- yeah, ZERO crossovers or mini/sub4m SUVs.

I'm not arguing in favour of our existant tax regime. All I'm pointing out that Toyota's portfolio is complete and utter mullock.
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Old 18th September 2020, 20:33   #192
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

This is testament to the power of Indian bureaucracy/government in making and breaking companies. Companies in the west make statements like these all the time, sometimes to get concessions (like Amazon wanted for its second HQ) or to disagree with a policy or statements (like many US corporations who sought to disassociate from Trump). In India, companies quickly learn that errant statements will invite ED, ESIC, Customs etc to suddenly forget their usual cut for business as usual and discover laxity in operations.


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Originally Posted by Aditya View Post
Now, Masakazu Yoshimura, Managing Director, Toyota Kirloskar Motor has given a statement on the matter.



Link to Team-BHP News Article
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Old 18th September 2020, 20:38   #193
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Okay, for what exactly?

In a market which eats up anything that's even slightly jacked up, Toyota sells exactly- let me check- yeah, ZERO crossovers or mini/sub4m SUVs.

I'm not arguing in favour of our existant tax regime. All I'm pointing out that Toyota's portfolio is complete and utter mullock.
That's my point. Toyota cannot produce a car that sells at scale. To do that they need to invest in a production line and wait for the market to lap it up - which comes with its own risk. Another way to improve sales without a great product is to lower the price. That's econ 101!

Instead of them tightening their belt and lowering the price, they are asking the government to lower the taxes. A sizeable chunk of us who hate (non innova/fortuner) Toyota products will consider buying them if they cost 15% lesser on road. Sure, this will boost overall industry sales, but might just help Toyota achieve scale economies and possibly begin a virtuous cycle where they invest back and produce cooler cars.

PS: Having watched the big 3 CEOs drive to DC for a hearing, it was only Alan Mulally who came out the winner. So I'd prefer Toyota sort this out by themselves.
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Old 19th September 2020, 08:10   #194
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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In the whole market only 2 companies really make business sense (Maruti and Hyundai/Kia) - can include Tata and Mahindra because of their Indian base. This is precisely because of the volumes they are able to drive. The industry will be helped as a whole if more demand can be generated and the easiest way to do that is to reduce the indirect tax (GST) to something reasonable (12%-18%). If this helps drive demand then the net income for exchequer will also not be significantly affected - in fact it will be increased because of the downstream activities.
There's no GST on exporting cars. How many of them they export?
When Govt asked the subsidiaries to pay less royalty to their parent companies, this is the response they have for the Govt.
Car manufacturers should learn or be inspired from 2 wheeler manufacturers and make some radical changes to their approach.
I can understand Kia selling big numbers due to Hyundai factor but I still can't get over the fact that MG Hector is also selling in good numbers for it's segment. I'm not against the product but all the existing companies should be ashamed of the fact that a newcomer knows more about the market then them.
It's time for them to stop finding reasons to blame one policy or another and rather ask if they have got what it takes or not!
Just for a fact, none of the American manufacturers succeeded in penetrating Japan's market although everyone tried.
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Old 19th September 2020, 08:17   #195
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

My take is that it's a case of "pot calling the kettle black": Both are greedy entities here: Govt and Toyota. Govt has sky high taxes to cover it's inefficiencies and burgeoning bureaucracy and Toyota has been consistently charging a huge premium on all it's products: whether they sell or not. Besides Crysta and Fortuner they have no products to speak off and even those aren't exactly mainstream.
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