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Old 15th September 2020, 16:58   #61
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by Shreyans_Jain View Post
This statement is is bit rich, coming from an officer of a company which is the brand ambassador of complacency in India. Toyota India makes its living off selling extremely overpriced UVs that are mostly bought on blind trust. Toyota hasn’t been a victim of our herd mentality approach of buying cars, which has been the undoing of so many manufacturers. It has prospered and profited off of it.

Theirs is a simple case of not launching new products because they know they won’t sell at they price points they want. They are so used to a certain kind of margins that they have lost touch with reality and what the competition is doing. We agree that the sub 10 or sub 12L segment is extremely cost competitive full of de specced India specific products. But that’s not the case higher up. What’s stopping them from launching a genuine contender in the 18-25L segment? The regulation quoted by the gentleman are not applicable here. It is just their insistence on excepting the said product to sell at 30L. Which even they know is not going to happen.
+1
I do agree about the tax system in India on the automobile sector. However you have hit the bulleye. I always felt that Toyota sold overpriced cars and our Indian herd mentality always went for a product blndly. With new manufacturers Kia and India manufacturers like Mahindra and Tata making good products, Toyota has now tasted the actual truth.
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Old 15th September 2020, 17:04   #62
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Any comparative study on what is the tax levels in other countries for above 4m cars which can shed light on why this statement was made?. AFAIK, Singapore is still the country which has the highest tax on new car for obvious reasons. Their public transport is too good to justify a personal vehicle.

Germany levies taxes based on cc capacity and CO2 emissions. No idea how to calculate it.

US has a 5% or something tax payable annually . Note the word.

PS: i believe that this is some pressure tactics by Toyota for getting leeway from GOI during back channel talks. If they are serious they generally do it through higher level japan to india talks. Apart from Germany only Japan has cabinet level interaction with GOI.

Kia wanted to move out of Andhra. Whatever happened to that now?.

Last edited by srini1785 : 15th September 2020 at 17:28.
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Old 15th September 2020, 17:25   #63
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Toyota India management is just a bunch of underachievers. I have dealt with them & they are happy with average jobs till it seems fit. I'm sure when they travel to HQ in Japan, all they boast about is margin per sold, & are clueless when asked on increasing sales. Fortunately, Toyota's standards & goodwill are high enough to bypass these bunch of jokers & their idiotic antics. I bet these people won't go anywhere till they are kicked out or retire gracefully (Toyota Japan Management permitting).

I'm sure they could have sold more than what Hyundai+Kia is managing if they had proactive Indian management. Indian demand for premium small & mid size vehicles could have easily helped them rake up requisite numbers, utilize capacity & got or expansion. They should realize they have sold more Baleno hatch than Etios hatch they were selling, but the price should be right & performance adequate for buck. I'm sure they do not have any issue with after sales.

Coming to auto-sales, expansion & blaming policy, it's like sour grapes story. They are happy selling borrowed cars, but do not want to invest on bringing new platforms to India. Remember policies are same for everyone, & their luxury vehicles (including SUV) are selling at prices higher than German Marquees'.

They are reluctant to bring the latest products to India. They practically replaced the Corolla with smaller Yaris. In few markets Corolla has 1.6L engine as option. Innova & Fortuner are now in overpriced category, & they have no new trick up the sleeve. Add to this, their this admission would mean they are ready to pack bags leaving the market at mercy of (future subsidiary) Maruti-Suzuki & it's products. They are only harping on Hybrid Technology, whereas they could have easily worked on embracing Natural Gas (VW Group will go big guns in India too, with Skoda leading the charge). They have denied good products to India. Where are RAV4, Corolla, Yaris Hatch, etc? Wake up Toyota Bharat... smell the coffee. The Etios despite issue sold well with cabbies because of huge boot (~600 liters). Up North, cabbies drive up to 500 Kms one way on the GT road in CNG-ed Etios as CNG is available in many states. They could have done a gradual face lift keeping core values to ensure they build up reputation for Etios brand. Rather they brought Yaris at highest price point & to add insult to injury it does not feels spacious enough nor does it perform as good as Etios.

You have made Toyota lose to Tata, Mahindra not Toyota Japan has lost to Government policies.
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Old 15th September 2020, 17:26   #64
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by aniketi View Post

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.
Liva was a pathetic product and hence it was destined to fail. There are no two ways about it. Ever think why a RAV4 or a C-HR did not land up India? When the tax slabs vary according to engine specification, ground clearance or for that matter length and which are nowhere else but in India, then global companies will always look for the scale and decide not to bring their best.

All I can say is uniform policies are always good for future instead of governments going for short term money making policies which hurt the industry as a whole and more so for a complex industry like automobiles.

Last edited by ABHI_1512 : 15th September 2020 at 17:33.
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Old 15th September 2020, 17:48   #65
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Overall the taxation on the automobile industry and related areas has been haphazard - would like to quote 3 recent goof-ups:
  • The way GST was grandfathered onto Car Lease for cars bought during the VAT era was a daylight robbery. The Govt. somehow later applied some vague logic of abetment but most people were burdened with unplanned expenditure due to this double taxation.
  • Then again, GST made some of the large cars cheaper - and then they realized this and added Cess etc. and made them more expensive again
  • Again more recently the FM issued a statement saying two wheelers are neither a sin or a luxury and will look into fitment of these onto a different GST Slab

In this modern age of Analytics where all this data can be visualized easily on some reports/graphs using software - it is not necessary to pass the rule, implement and then make a U-Turn - most of these can be understood/analyzed prior to the implementation itself.

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Originally Posted by haisaikat View Post
I think its case of Toyota trying to publicize this issue as a stunt to find support from other makers or even pressurize Government for relief.
I think Toyota has a right to say what they have said, the timing of it, kind of maps to putting pressure on Govt. which I believe is a good move. The Govt. also seems to be looking at reduction in GST (URL) and these statements are being made so some action happens.

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Originally Posted by ramki.grandhi View Post
Proposed amendment:
1) To play a fair game, TCS must be introduced on all cars.
2) Interest paid on car loans must get tax benefit, atleast once in 5 years.
Good suggestions those.

Last edited by vsrivatsa : 15th September 2020 at 17:50.
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Old 15th September 2020, 17:59   #66
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Surprising really. Are the taxes applicable to Toyota only? One would tend to deduce so based on what Toyota management is crying about.

Now, there is very little in terms of technology they have brought to the Indian auto industry. Is it just that the import duties are hitting Toyota more because they have low localization? They have some of the best plugin hybrids, but have chosen not to bring any of that to India. Plugin hybrids do not need any special infrastructure. To a fuel efficiency focused market it would make immense sense to have hybrids on offer.
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Old 15th September 2020, 18:02   #67
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by msdivy View Post
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.
Both of us are assuming then, seems fair.

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Originally Posted by msdivy View Post
Suzuki's partnership with GM ended in 2010, Volkswagon in 2015. Suzuki doesn't have all technology to be free-standing car maker.
Still Suzuki manages more than 50% market share in globally the 4th biggest car market. And thrives in the same market where Toyota finds selling cars difficult due the taxes and policies. Reasons could be many, but they have managed this for so many years, they must be doing something different.

In my opinion its not on Toyota's capabilities or lack of products. They aren't the largest car manufacturer in the world for nothing. Its the attitude towards India and its market. They are selling only two cars in respectable numbers Innova Crysta and Fortuner. They have other cars in the market, the numbers speak for themselves. They do not sell due to lack of kit, nor because the Indian market is allergic to Toyota. Let us see how the Urban Cruiser (Brezza) goes.

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Originally Posted by msdivy View Post
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.
It its such a bad deal for Toyota I am not sure why they will sign it. Not sure how the Japanese Government can arm twist the biggest car maker in the world to sign a deal contrary to their interests. But may be you know more than I do here.

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Originally Posted by msdivy View Post
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.
This is the win-win situation they are targetting from the JV ofcourse. Till now in India we have seen only Toyota getting two models from the Maruti stable, nothing the other way round.
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Old 15th September 2020, 18:15   #68
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Toyota has succeeded in Indian markets only in segment where they have had monopoly eg. Qualis , Innova , Fortuner. Rest of their products have been mediocre for our market and they have always been lazy on new launches. Their cars have always been overpriced eg. Current Gen Innova at approx 28 lakhs is overpriced .

They need to do a case study on how Kia has entered India with a bang. Kia has a clear focus on Suv and Premium MUV market and not doing copy paste job like they doing with Maruti Products.

They could have focussed on launching Yaris hatch , Creta segment car and Harrier/ Compass Segment car . Guess they are in market to always keep whining.
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Old 15th September 2020, 18:15   #69
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by Garth View Post
Still Suzuki manages more than 50% market share in globally the 4th biggest car market.
50%, 4th largest - it is twisting the numbers . As it stands Toyota sells more than 10 million vehicles per year, while Suzuki manages 3 million, and more than half of those 3 million are from India.
Quote:
Till now in India we have seen only Toyota getting two models from the Maruti stable, nothing the other way round.
Maruti will be launching Corolla. Toyota was selling Corolla in double digits and would be happy even if the sales double. The bargain is Maruti got the worst-selling Toyota & Toyota got the best selling Maruti.
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Old 15th September 2020, 18:31   #70
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Taxation laws and regulations definitely requires a re think. To blame it entirely for halting your product road map doesn't sit well with me personally.

I agree with most of the observations here that the taxation and ease of doing business needs wholesome changes. We are slowly getting there, albeit one step forward and 2 steps back on account of the current situation. Honestly this was the period of bring wholesome changes, but there is a priority to be provided to the electorate as well.

For an automotive manufacturer, there's always a catch-22 situation.

Do I settle for higher margins and focus on a bunch of products? Milk as much as you can if your product is successful and then start cribbing when things start to go downwards

or

Should I launch mass market vehicles and have lower margins, albeit higher volumes? Oh! wait I will need to up my captial expenditure including local design and development and have a long payback time too. The only alternative is to make use of the global alliance and see how you can leverage their platforms and rebadge vehicles (But, whoever thought it would give volumes must be found first!)

Toyota, in my personal view has tried to hit the middle path taking advantage of both worlds. But every iteration of their best sellers (Innova, Fortuner, Etios) have seen prices soar up north. To add, smarter competitors like Kia know where to hit to build a brand and then take it a notch above. So as a manufactuerer, I am bruised a bit by the competition and I need to dig my product roadmap that I had promised years back else I can point fingers at the current condition of doing business.

Since their entry in 1997, Toyota has launched Qualis, Corolla, Innova, Fortuner, Etios twins while the Camry, Prius, Land Cruiser, Prado, Velfire are all imported as CBU. For 2 decades they had the opportunity, but were happy milking out current vehicles.

While Toyota plays in a niche market, I don't know if they have understood the fact that India is essentially a hatchback country and we love cars that are less than 4m (Even without the concessions in my view!). All these years, they designed and launched one hatchback, ETIOS and rebadged the Baleno. With their global knowhow, why hasn't their management thought about looking at their Japan model to launch some of their hatchbacks here.

Globally, the famed Toyota reliability got impacted on account of the Airbag scandal and it has started to put pressure on their margins and investments. It is starting to show on their lower investment regions like India, so in my personal opinion, a top ranking exec can blame the environment rather than look in-house
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Old 15th September 2020, 18:40   #71
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by msdivy View Post
50%, 4th largest - it is twisting the numbers .
Both of these are cold stats. India is the 4th largest car market in the world. Maruti holds more than 50% of this market.

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Originally Posted by msdivy View Post
As it stands Toyota sells more than 10 million vehicles per year, while Suzuki manages 3 million, and more than half of those 3 million are from India.
Agreed. Toyota is the world's largest car maker. So they are bound to sell more than Suzuki. You are overlooking the point I am trying to make. Toyota is complaining about policies, while not trying to fix things in their control. Others are thriving in the same market by working on things in their control and working alongside/ inspite of the policies and laws. Our laws and policies are certainly not the best in the world.

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Originally Posted by msdivy View Post
Maruti will be launching Corolla.
This is news to me. Thanks for sharing this. Lets see what Maruti does with this.

Sir, seriously you seem to be taking me way out of context based on your assumptions (or maybe you know way too much more than what is in the public domain). Let us respect each others views and agree to disagree.

Let us accept the two below facts and move on -
You believe Toyota has been wronged in this market/ this market is not favourable to them, but they are trying to make the best of the conditions without any support from the government.
I believe that Toyota has been taking the Indian market for granted. All of a sudden there are new competitors in their cash cow segments. Instead of working on their flaws they are being a cry baby.
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Old 15th September 2020, 18:47   #72
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

If we leave legacy issues of Toyota for another discussion, these are some fair and Valid points raised by Toyota. The total Value of the business Toyota India does should be better than many other companies despite much lower numbers, as the average cost of their cars is much higher than others. Let's not count just the number, Maruti's average car value should be less than half of Toyota.

Single most problem with most MNC especially with Japanese is that they need to see a clear Road Map and a commitment from the Government on continuation on those. Recently the Government has come out with a draft paper on what all needs to have some India specific standards before they can import. And now, hike on the duties of CKD kits. This leaves companies like Toyota who depend a lot of Import Kits on cross-roads. We all ridicule for high prices for an Innova, but does everyone know that Toyota gets less than 60 % of the Ex-Showroom prices, rest goes to the Government via custom duties/ GST, etc. And if that's not enough, barring corporates, individuals have to pay 30 % and higher Income tax first to get that money.

Worldwide GST on Autmobiles is same as on anything else and even Custom duties if any are adjustable with GST in many. There are many people who earn from this segment- manufacturers, their vendors, dealers and their employees and even down the food chain to that roadside hawker. It's a complete chain.

Hypothetically, if GST is reduced to Automobiles to say 28 % with no cess, prices of larger cars will drop by 20-25 %. I am sure everyone will do more business and the government will also get more taxes, but no one wants to appear pleasing this segment.

Let's see if the policy makers take this as a feedback and do something or just leave Toyota sidelined.

Last edited by Turbanator : 15th September 2020 at 19:12.
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Old 15th September 2020, 18:56   #73
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I think it is a multi-dimensional issue. First of all, governments over the years did zilch to improve public transport, it being largely a state/civic issue. Thats the reason for the abnormally high usage of 2 wheelers per capita.
Second. just like white goods or airlines, cars are still somehow considered to be a rich man's toy, harking back to the 50s/60s (badi gaadi valey Seth ). Ergo, the 4m, 200mm ground clearance rule, which has no rhyme or reason whatsoever.
Meanwhile tin cans, bread boxes (mini trucks, pickups) and rashly driven lorries, tankers, cement mixers and dumpers rule the roost, putting paid to any decent safety norms possible.

On the other hand, certain manufacturers simply haven't brought innovative products to the table, (e.g. Honda/Toyota and I daresay Maruti Suzuki), and peddled their best sellers for far too long.Atleast MSIL is limited in terms of diversity of products beyond 10 lac, but still, they essentially run on K10 and K12 engines for nearly 90 % of their products.

In contrast, HMIL/Kia are certainly being a bit more innovative, although also sharing powertrains at more widely spread price points.
TML has been very bold of late, not hesitating to trim the life cycles of their products (Zest/Bolt/Safari/Hexa) and trying to atleast innovate by bringing futuristic options.
Even the Germans are trying, although they are also essentially sticking to old cars but with new engines.

The government has to really face the auto industry issues with an open mind, imparting the industry the status of critical infrastructure at par or above agriculture, energy, railways, I am sure the best (or most well intentioned) industry minds will be up to the task.
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Old 15th September 2020, 18:59   #74
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

This is fox and sour grapes story. How come people who have come after them are successful and expanding? For example take Hyundai and Kia. The Kia Seltos and Sonet are hits and so are Hyundai Venue and other cars. Now they are launching the Carnival at 35 lacs with about 2000 booking 1 month after the launch date.

Toyota as a company and their marketing team is to blame for this. They launched Qualis and went on with it for so many years. They became taxi company. Innova followed suit, then Etios is the same saga and now it is their rebranding strategy - take Suzuki car and rebrand and sell. lol....blaming others for their own mistakes!
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Old 15th September 2020, 19:12   #75
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by Turbanator View Post
If we leave legacy issues of Toyota for another discussion, these are some fair and Valid points raised by Toyota. The total Value of the business Toyota India does should be better than many other companies despite much lower numbers, as the average cost of their cars is much higher than others. Let's not count just the number, Maruti's average car value should be less than half of Toyota.
Bang on sir and I remember in 2019 a thread was created, the money Toyota India was making over other brands was not a joke!

https://www.team-bhp.com/forum/india...ed-2018-a.html (How much revenue each Indian car generated in 2018)

Definitely the government needs to change the taxation policy, give relief to the automakers and if taxes are reduced more people can buy slightly more expensive cars (the volume of cars bought will also go up) and the government can still get almost the same amount of taxes they would get previously!

Last edited by CEF_Beasts : 15th September 2020 at 19:14.
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