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Old 15th September 2020, 15:07   #46
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I have often ranted against Toyota, they are extremely lazy when it comes to India. But then the issue is not with Toyota alone, but the industry as a whole. I agree with them on this.

All the car-makers have said many times to the government that they need to commit to some long term policies so that OEMs can plan for the future and invest accordingly.

But have they done so? No. Every other day there is something new which comes out.

Every year before Budget there are hints dropped about GST is being cut, but ultimately has not happened.

For how many years have we been hearing about this scrappage policy? How many times have they flip-flopped on EV/hybrid/plug-in policy?

Rules keep changing regarding insurance, financial services.

There is total confusion regarding whether old BS4 stock can sold or not, can be registered or not, till what dates etc.

The industry itself has invested tens of thousands of crores over the last few to keep up with government regulation regarding safety, fuel quality, making changes to their strategy when faced with sudden bans on diesel, engine-sizes etc.

But what has the outcome? Tepid growth.


I put together the calender year sales figures from Team-Bhp between 2014 to 2019. In 2014, India had passed the mark of 2.5 million cars sold per year. It was expected by 2020 we will be passing 4.5 if not hit the 5 million mark. Instead sales have grown much slower and crashed in 2019.

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The sector is saddled is massive excess capacity. And this was before the COVID crisis. It will take till 2022 probably for sales to reach 2018 levels!

The government is now towing with taxing CKDs and SKDs more. OEMs have also been told to reduce royalty payments, which is kind of a government overreach. What next, it will become a law which says they can't pay more than a certain percentage?

There has been constant interruptions regarding imports from China regarding auto parts.

Now here's the problem. If I am a foreign auto OEM, why would I care if India's dependence on imports is increasing or decreasing? If I want to be competitive in the market and also export cars (since the government is pushing exports), I need to create a cost base for myself which will give me the freedom to import from wherever I want and export it too.

The government has been tightening the screws on imports, pushing automakers to find Indian alternatives. Indian suppliers might not be cost competitive, but sorry you have to buy Indian.

https://www.reuters.com/article/indi...-idUSL4N2G02N2

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Foreign automakers are seeking delays and exemptions to India’s planned new quality rules for imported auto parts, arguing the regulations will increase costs, hurt sales and disrupt supply chains, sources with direct knowledge of the matter told Reuters.

Prime Minister Narendra Modi is keen to reduce imports to boost local manufacturing to make India more self-sufficient and enable it to play a bigger role in the global supply chain. That said, the move is seen mainly aimed at slashing the amount of lower-quality imports from China.

Last edited by avishar : 15th September 2020 at 15:11.
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Old 15th September 2020, 15:10   #47
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by Nithesh_M View Post
I am very happy about this. I hope Honda, Ford and others follow suit.The govt is busy hiking taxes and adding new taxes to them and then reverting added taxes when it fails and so on. Its a nightmare.
I second your opinion, all the companies should opine against our tax system. Taxation is good but some of the tax policies are pure bullshit , of which most them have been mentioned in previous posts by BHPians.

One of he most unfair and illogical automotive policy in India which I seriously hate is the Third Party Liability premium based on the cubic capacity. Suppose the third party is unfortunately hit by a car, why should the liability be more if the car is of 1600cc and less if it is 1500cc ?!
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Old 15th September 2020, 15:24   #48
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by Sutripta View Post
Wonder how long Toyota discussed it in their boardroom before passing down the order to their executive to make the statement.
These are not off the cuff remarks.

Sutripta
You are absolutely right & it must be a very deliberate decision to put that across ! .

Pushing for electric cars manufacturing without a clear roadmap in country like India can be disastrous for auto business.

Toyota's strength lies in ICE & Hybrids . I am very sure Toyota would have tried their best to convince the Govt officials that the next 4-5 years or even next 10 years hybrid is the best fit for India along with ICE considering the power & infrastructure requirements. I am not sure the officials has a ear to hear .

I wonder who's making money other than Maruti & Hyundai . Every other manufacturer has extra capacity or just hanging out there with one or 2 models and pinning hopes for hay days to come or even thinking to tie up with a good suitor
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Old 15th September 2020, 15:37   #49
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Why cry and blame, when you are unable to compete! In my opinion taxes should be maximum for high end vehicles with bigger engine and larger foot print.

With same tax structure, new companies like Kia, MG are successful and existing manufacturers like Hyundai, Maruti even Tata are doing brisk business with their new range of products. Toyota needs to adopt to the market and political environment.

When things were favourable with lesser competition, Toyota went on milking their Innova customers with ever increasing price graph and there was no complaint. Now you have nothing exciting to offer, so blame it to system, legit!

Then, what is luxury, when you pay the same rate of tax with a Maruti owner? Add to that, Toyota was never a luxury brand!

Last edited by Subby : 15th September 2020 at 15:38.
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Old 15th September 2020, 15:43   #50
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

That's a looser's statement. Taxes in India are weird, they are high agreed but they are same for all manufacturer's here in India. If others are doing business with it, why can't Toyota? Reality is they are not able to deliver what Indian client wants. Day by day, they are loosing business. Just to hide own failures, they are blaming government, ridiculous. Kia came year back in India but doing great business. Maruti, Hyundai, Mahindra, Tata all are doing good with same rules. Don't cry Toyota, fight it, else leave it. Bye bye.
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Old 15th September 2020, 15:44   #51
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by Subby View Post
Why cry and blame, when you are unable to compete! In my opinion taxes should be maximum for high end vehicles with bigger engine and larger foot print.

With same tax structure, new companies like Kia, MG are successful and existing manufacturers like Hyundai, Maruti even Tata are doing brisk business with their new range of products. Toyota needs to adopt to the market and political environment.

When things were favourable with lesser competition, Toyota went on milking their Innova customers with ever increasing price graph and there was no complaint. Now you have nothing exciting to offer, so blame it to system, legit!

Then, what is luxury, when you pay the same rate of tax with a Maruti owner? Add to that, Toyota was never a luxury brand!
This is all fine friend. You are or were right. Looking at the economy overall, job losses etc, we cant keep saying this. Most people although wanting cannot buy what Toyota has inspite of paying loads of tax. These people are not the ones who would just say something without thinking on it for long time.

There is a systemic fault in our handling of economy and some things need to change. We cant keep driving only Maruti and Hyundai, can we ? Even the bigger cars Hyundia and Kia have in the market is due to the cushion they have with their smaller vehicles.

Last edited by srishiva : 15th September 2020 at 15:45.
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Old 15th September 2020, 15:47   #52
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I do agree that the taxes in India are atrociously high but its a bit rich of Toyota India to say this on record. We have all seen that when taxes are reduced, the prices of cars dont go down as much as they should have, for example lets assume GST is reduced by 10% on a luxury car then the price of the car should go down after factoring all reductions by atleast 8-10% but that never happens.

Toyota India needs to realise that pricing a 30 lac car at 45 lacs (Camry) is not going to get them any sales. I wanted to buy one but at 45 its just ridiculous. Its not worth it. Also reports of them bringing the RAV4 at 65 lacs is also as ridiculous as possible.

I think both the GOI and the SIAM needs to sit and discuss long term future of the automobile industry taking along all the states. Firstly, what we need is one country, one rto, charge one price for entire country including road taxes and on road price should be uniform in the entire country. Secondly, we need to figure out our roadmap, EV can come but the next 7 years seem too ambitious for entire country to move to an EV without any existing infrastructure. The only solution is to incentivise proper Toyota Honda type proper Hybrid Petrol cars for the next 5-7 years, and a view that by 2028 or 2030 we have EV or whatever else that is environmentally friendly is made available and infrastructure is started of being in place by 2025-2026. EV's are not really environment friendly but thats another story.

Proper discussion between GOI and SIAM needs to happen at the earliest and this time the GOI needs to listen and rationalise and reduce their taxes on vehicles so that taxes do not exceed 30-35% price of a car and secondly introduce GST on fuel so that fuel as well doesnt cost an arm and a leg and doesnt exceed 30-35% price of a litre of petrol / diesel.

Lets hope some forward thinking leaders are still existing in both parties.
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Old 15th September 2020, 15:51   #53
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

While all the rant about taxes and policies is fair, it is high time that Toyota stops resting on their laurels and demands deserving prices for their cars. I mean, look at their price chart - atrociously high all over! As an example - the Fortuner and Endeavour are neck-to-neck when it comes to respective top variant pricing but you get WAY MORE with the Ford than the Toyota here. All the talk about quality, reliability, etc. is passe - most modern cars are in the same quality/reliability bracket these days and one cannot keep milking customers on grounds which are more than a decade old when the only comparison in the UV realm was across a Fortuner and a Safari/Scorpio!

Last edited by cool_dube : 15th September 2020 at 15:53.
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Old 15th September 2020, 16:03   #54
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

"India not conducive for auto sector?" I think the response will be a very different one if you would ask this to Kia right now instead of Toyota (even though Kia has had a few problems of their own from governments).

I think for Toyota this is a classic case of 'the grapes are sour'.
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Old 15th September 2020, 16:07   #55
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

While many members are saying that Toyota is in the wrong here, please consider the cascading effects this will have on manufacturing investments into India. Many global companies will think many times before spending on a factory here, and the toyota statement is going to add to their concerns.

Personally, I find it surprising that the taxes on cars are so high in India. I mean, what does the government really give to a manufacturer? Most companies have captive power plants because the grid is unreliable. Land is atrociously priced in India because of zoning regulations- land in Australia or Canada or even the US is cheaper than many industrial areas in India. The infrastructure in most industrial areas is beyond description- just drive through the MIDC areas near Mumbai after a spell of rain and you will be lucky to find a single road that is not potholed.

I also read a recent report from MP where it was reported that the taxes on MLA salaries were being paid by the exchequer, in addition to their salaries. It doesn't make sense to get the public to pamper the legislature with a tax free salary and then burden the same public with atrocious taxes.

Last edited by Cessna182 : 15th September 2020 at 16:08.
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Old 15th September 2020, 16:18   #56
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Wait what? Oh Toyota you lazy company. Let us see the innovative products you made recently
  • Etios Cross - Flop
  • Etios Liva - Look at the interiors - Super Lame
  • Yaris - Super Flop
  • Black Yaris - Utter Flop and lame attempt
  • Glanza - Re-badging innovation
  • Urban Cruizer - Bumper face lift innovation

The only note worthy products are Crysta and Fortuner. If new entrants like Kia and MG can kill it with superb strategy and great products, why can't a giant like Toyota do that? Stop blaming government for your failures. Bring better products and then see wrath of Indians. Bring in Diesel Yaris with updated interiors and Diesel sub 4 meter SUV (Not Brezza).
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Old 15th September 2020, 16:30   #57
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This is plain stupid and crazy stuff from Toyota. Policy related issues were there yesterday , they exist today and will be there tomorrow. What have they done except overpriced fortuner and innova ? IMO, Skoda deserves more respect and attention for their commitments and investments in India. They have always brought their best products forward and made them available here , even though the sales number for their products are less compared to others.
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Old 15th September 2020, 16:35   #58
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by Subby View Post
Why cry and blame, when you are unable to compete! In my opinion taxes should be maximum for high end vehicles with bigger engine and larger foot print.

With same tax structure, new companies like Kia, MG are successful and existing manufacturers like Hyundai, Maruti even Tata are doing brisk business with their new range of products. Toyota needs to adopt to the market and political environment.
You see, every automobile company plans for the future and sometimes that future planning goes on for more than four to six years. Now if government policies are not uniform and the flip flop is rampant then there is little hope for the auto companies at large.

Maruti, Hyundai and Tata have maximum products in the mass market and they are not actually competing with Toyota in that sector. The main issue here is policy flip flops and there the government is largely responsible.

Even before the pandemic, the auto sector was in doldrums. Job losses were huge and and the blame for that lies with the policy flip flips only. Just to name a few-

1. Transition from BS4 to BS6 in such a short time putting pressure on all. It’s another matter that companies were able to pass that deadline.
2. Bundling of Third party insurance and which has since been discontinued.
3. The EV policy is another bummer with so many twists and turns. The electrification order of certain cubic capacity two wheelers by 2023 is another of high handed orders by NITI Aayog.
4. We all know how the hybrid engines experiment was sabotaged by policies of the government.

Toyota is big on EV’s already but they can’t have short term plans for India where the market is complex. Policy flip flops are a major deterrent and no investor will be comfortable in putting money where deeper understanding of the sector is required instead of some blitz making statements !

The pandemic has made the scenario even worse. Instead of finding ways to mitigate the losses and provide some relief to a sector which contributes to GDP of the country, the policy indecisions are making it worse. Kia and MG are initial success stories and we will talk about them after five years and decide whether they are successful or not !!

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Originally Posted by aniketi View Post
That's a looser's statement. Taxes in India are weird, they are high agreed but they are same for all manufacturer's here in India. If others are doing business with it, why can't Toyota? Reality is they are not able to deliver what Indian client wants. Day by day, they are loosing business. Just to hide own failures, they are blaming government, ridiculous. Kia came year back in India but doing great business. Maruti, Hyundai, Mahindra, Tata all are doing good with same rules. Don't cry Toyota, fight it, else leave it. Bye bye.
Maruti, Mahindra, Hyundai, Tata doesn’t have products in the segment that Toyota now sells. An automobile company which is one of the largest manufacturers in the world has nothing to lose if they exit India. The loss will be India’s and it’s sunrise manufacturing hub of automobiles. If they were a failure, then they would not have been successful in a country like USA and the likes. Ask any Toyota owner and they will vouch for the reliability of their purchases and therein lies its success.

Policy flip flops will always impact the companies who have long term future plans and not the ones who ride on borrowed technologies. And still if you want to put the Loser tag on Toyota which is a worldwide major then perhaps that I will find hard to fathom !

Last edited by ABHI_1512 : 15th September 2020 at 16:57.
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Old 15th September 2020, 16:42   #59
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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When you say "The fact that Toyota is complaining means their proposal was not accepted.", seems you are assuming that they went with a proposal, and it got rejected. You might be right, but there was no news covering this, so for me its an assumption.
Yes, it is an assumption. I also assume Toyota is lobbying and then gone to media. And also I think Toyota wouldn't make their appointments with the Govt public.
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Really? If this was not in their interest why would they pump millions of dollars into the JV? You clearly seem to have your sources in the right place, because this was not reported anywhere, or maybe I might have missed it. Seems an interesting take.
Suzuki's partnership with GM ended in 2010, Volkswagon in 2015. Suzuki doesn't have all technology to be free-standing car maker. They brokered an alliance with Toyota in 2016 (possibly with Japan Govt's co-ordination). Toyota was reluctant and this partnership was going nowhere. Suzuki the with help of Japanese Govt got Toyota to the table & finally signed the deal in 2019. As part of the deal, among other things, Toyota gets to launch Suzuki cars (no R & D cost to Toyota) and Suzuki would get hybrid & other future technology like EV from Toyota.
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Old 15th September 2020, 16:57   #60
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by ABHI_1512 View Post
Maruti, Mahindra, Hyundai, Tata doesn’t have products in the segment that Toyota now sells. An automobile company which is one of the largest manufacturers in the world has nothing to lose if they exit India. The loss will be India’s and it’s sunrise manufacturing hub of automobiles. If they were a failure, then they would not have been successful in a country like USA and the likes. Ask any Toyota owner and they will vouch for the reliability of their purchases and therein lies its success.

Policy flip flops will always impact the companies who have long term future plans and not the ones who ride on borrowed technologies. And still if you want to put the Loser tag on Toyota which is a worldwide major then perhaps that I will find hard to fathom !
They don't sell products in that segment because they don't have them. For years they are here in India and can't give us a single good small car is such a shame for car maker like Toyota. What they gave us is Liva, which was really third world car. If they can't develop a good small hatch for us, its their problem. Forget hatchback, have they given any proper sedan in last 20 years in India? Corolla was good but very costly and in D segment. For last 10 years we have premium hatch segment selling lakhs of cars, last 5 years we have sub 4 meter compact sedan car segment booming, last 3 years we have small SUV segment selling cars like hot cakes, what Toyota has done for that? Nothing. They are just busy looting people in Innova and Fortuner, that's it.

If they leave, i don't think its a loss to India in any way. We have many others to cater our needs. If they go, it's their loss and not ours. Instead of developing good cars, they are satisfied with selling re-badged cars of Maruti is really sad strategy. Can't expect such a sick strategy from so called world class manufacturer.
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