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Old 15th September 2020, 19:15   #76
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

This statement by Toyota has reached far and wide. It is very rare that corporate India ever really shows umbrage against government policies. As expected some placating is going on now.


https://twitter.com/PrakashJavdekar/...52041865035776

Quote:
The news that Toyota Company will stop investing in India is incorrect.
@vikramkirloskar
has clarified that Toyota will invest more than Rs 2000 crore in next 12 months.
https://twitter.com/vikramkirloskar/...58222197288969

Quote:
Absolutely! We are investing 2000+ crs in electric components and technology for the domestic customer and export. We are committed to the future of India and will continue to put all effort in society, environment, skilling and technology.

Ofcourse Mr Kirloskar is part of the diversified Kirloskar Group, in which a Rs 2000 crore capex is not something out of ordinary (and not necessarily for Toyota). But it should be enough for Social Media discussion.

Last edited by avishar : 15th September 2020 at 19:17.
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Old 15th September 2020, 19:18   #77
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I find it funny that like most TV debates these days, this too has been somehow turned into a Toyota vs "The one who should not be criticised".

The sole purpose of this whole thread was not to ridicule Toyota regarding their product pricing. It was about the larger issue that our rules and regulations prevent global auto makers from launching more products in our country. And time and again, most auto makers have hinted at the same including VW, Mercedes etc.

Toyota's product range is their decision. As a customer, we can decide to not buy and eventually force them to shut shop. But let's not run away from our government's continued shortsightedness regarding the auto industry.
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Old 15th September 2020, 19:18   #78
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I agree that Indian taxation policies are absurd and not just in Automobile sector. Back in 2010 when I was working as a freelance Graphic Designer the taxation policies were so absurd that when receiving any amount into my Paypal account 30% was deducted as TDS and then currency conversion charges when I withdrew the remaining amount to my Bank account. Result is even though I was in Zero income tax bracket still for 1$ sent by someone to my Paypal account I will get equivalent of 64 cents in my bank account. Whereas even our neighbor Bangladesh charged only about 10% TDS to their residents for same process.

However what expansion has Toyota done to be honest in India ? Their only 3 big success models have been Qualis, Fortuner and Innova. Even though they had multiple models that could have been very successful here they never bothered to bring them to our shores and the models they brought were absurdly overpriced.

The only true effort they put in for our market was Etios range (Qualis(Kijang)/ Innova/ Fortuner were already successful in other markets and never changed in any major way for our shores)

The day Toyota decided to discontinue Etios range and replace with re-badged Marutis was the day Toyota made it clear that our market is nothing more than a cash cow for them.

I would be more than happy to buy a Tata/ Mahindra over Toyota any day because these companies are at least trying to listen to their consumers.

It is the fault of us a public that we bought over priced Toyota's instead of putting our faith in local brands or at least foreign brands that listened to us earlier.
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Old 15th September 2020, 19:21   #79
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Toyota has released a statement today on its commitment to India:

Quote:
Toyota Kirloskar Motor would like to state that we continue to be committed to the Indian market and our operations in the country is an integral part of our global strategy. We need to protect the jobs we have created and we will do everything possible to achieve this. Over our two decades of operations in India, we have worked tirelessly to build a strong competitive local supplier eco-system and develop strong capable human resources. Our first step is to ensure full capacity utilization of what we have created and this will take time.

In wake of the slowdown that has been exaggerated by the COVID-19 impact, the auto industry has been requesting the Government for support to sustain industry through a viable tax structure. We remain confident that the Government will do everything possible to support industry and employment. We recognize the strong proactive efforts being made by the Government to support various sectors of the economy and appreciate the fact that it is open to examine this issue despite the current challenging revenue situation.

Our recent partnership with Suzuki in India on sharing technology and best practices are also in support of the “Make in India” initiative and Indian Government’s policy, and aim to enhance the competitiveness of both companies.
Link to Team-BHP News Article

Last edited by Aditya : 15th September 2020 at 19:30.
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Old 15th September 2020, 19:30   #80
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Another clarification from both government and Toyota!
Attached Thumbnails
Toyota halts India expansion, blames ‘We Don’t Want You’ taxes-screenshot_20200915192911.jpg  

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Old 15th September 2020, 19:40   #81
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Toyota maybe investing 2000+ Cr in the next 12 months but what happened to the main topic that Toyota had said earlier the 'Taxation policy', it has been quietly pushed under the carpet!
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Old 15th September 2020, 19:45   #82
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

It's quite clear that manufacturers are not happy in the current situation. Toyota has been trying to capture market but they did what was the opposite people wanted them to. Had they been a bit clear about their own brand image of reliability and safety they wouldn't have gone ahead and started rebadging Suzuki products.

Instead they should have invested in more homegrown products and VFM propositions rather than just changing the front grilles of someone else's product.
It's good that they have invested in Hybrid technologies and stuff but when the market is not ready for them why expect people to walk in to sell them a hybrid when they don't know what it is.
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Old 15th September 2020, 19:46   #83
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

2000 Cr will go into what? They will probably use the money to buy Maruti from Suzuki and eat Suzuki as well and become the No 1 car manufacturer in India. If you are that rich then why will you work hard and not take the easy way. Prove me wrong Toyota, please.
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Old 15th September 2020, 20:04   #84
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Quote:
Originally Posted by sumeethaldankar View Post
2000 Cr will go into what? They will probably use the money to buy Maruti from Suzuki and eat Suzuki as well and become the No 1 car manufacturer in India. If you are that rich then why will you work hard and not take the easy way. Prove me wrong Toyota, please.
INR 2,000 crore for Maruti? The market cap of the company despite COVID is INR 200,000 crore. The promoters only hold 55% in the company. If Toyota wants to acquire, they'll have to first buy 25% from the promoters. This will trigger an open offer for an additional 26%. They can creep upto 75% (maximum non public shareholding allowed). Then they will have to run a comprehensive delisting process.

I think the Toyota-Suzuki collaboration can be a positive one. Imagine a Maruti car with Toyota Build Quality and reliability. I certainly look forward to the two companies partnering in India.
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Old 15th September 2020, 20:17   #85
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Quote:
Originally Posted by sumeethaldankar View Post
2000 Cr will go into what? They will probably use the money to buy Maruti from Suzuki and eat Suzuki as well and become the No 1 car manufacturer in India. If you are that rich then why will you work hard and not take the easy way. Prove me wrong Toyota, please.
Maruti marketcap is more than Ford's. Rs 2000 crores won't even get you past the front gate.
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Old 15th September 2020, 20:26   #86
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Alright here we go with the official statements:

Toyota halts India expansion, blames ‘We Don’t Want You’ taxes-img_20200915_202337.jpg

Toyota halts India expansion, blames ‘We Don’t Want You’ taxes-img_20200915_202308.jpg
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Old 15th September 2020, 20:38   #87
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

This statement seems more like a cover up for the previous statement which was published wrongly by many media houses!
Anyways, let's hope Toyota India doesn't scrap its plans to bring in new products in India and continues to bring new products.

What I believe is, Toyota should not bring the likes of the RAV-4 and Supra over here initially, and instead bring the likes of the Corolla Cross, Raize and Hilux at decent prices so as to focus on increasing market share and then bring the bigger models later on.

Also, I'm highly positive about the 2 SUVs and MUV in develpoment under the Suzuki-Toyota JV. I mean, what could be better than a Suzuki with a Toyota's build quality?
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Old 15th September 2020, 21:13   #88
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Quote:
Originally Posted by sumeethaldankar View Post
2000 Cr will go into what? They will probably use the money to buy Maruti from Suzuki
2000 crore is the amount Maruti invested in it's Rohtak plant alone over three years from 2016-2019

https://economictimes.indiatimes.com...0.cms?from=mdr

At best Toyota can buy the Gurugram plant from Maruti with this money (which it is anyways going to vacate)
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Old 15th September 2020, 21:15   #89
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

There are two sides to the coin -

a) Inconsistent tax policies: The problem is not about the policies themselves, but the stability and longevity of those policies. The tax on hybrids was considerably lower many years ago, which is why Toyota invested in bringing Lexus to our market. Before we bash Toyota by saying they should have made them here instead of importing, we need think when did we give the automakers enough time to make hybrids popular here? The tax rates were hiked up at a moment's notice, and voila - the very operating strategy of the complete brand is in doubt.

There are many more examples, like the 2000 cc rule in NCR. There is no denying in the fact that there is a complete lack of stability in our taxation/policy structure. Relate this to cricket - if the number of total overs changes mid-way, then won't that throw the captain's plans haywire?

b) Blame-game: Why is it that the world's largest automaker is struggling to survive when many others are conquering the market? The problem lies within. Any companies needs economies of scale to be profitable in a cost-sensitive market like ours. How can that be achieved?

- Increase local demand independently, like Maruti. It's a chicken and egg problem in this scenario, and a lot has been spoken about this, so I won't go deeper.

- Export to other markets from India, like Nissan, Ford, etc. The easiest way to start will surely be exporting to RHD markets. It doesn't need any extra effort. Why isn't Toyota doing this? Please correct me if I'm wrong, but I believe even Jeep is exporting the Compass to RHD markets across the world.

- Share platforms and engines. This, I think is turning out to be Hyundai/Kia's biggest underlying forte. All that cost saving is resulting in the addition of compelling features to their cars. The market is rewarding them in return. That is what I believe Ford aims to do with Mahindra, and I pray they turn out successful. In Toyota's context, why can't the Maruti/Toyota arrangement be more than just badge engineering?

Imagine Toyota taking the S-cross platform, along with the K15B powerplant, re-tuned if needed. Give it a completely new body, something which looks like a smaller Rav4 for example.Why won't it sell? How about taking the Swift/Baleno platform along with its K12B engine, and giving it a micro-SUV style body, along with a CVT?

Toyota's claim on our policy instability is true. However, with sufficient determination, comes the creativity to make a mark and survive in a difficult situation. Sadly, the world's largest automaker doesn't seem to have either of these when it comes to India.
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Old 15th September 2020, 21:31   #90
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Ok so there are certain aspects to this. If the government seems to be at fault over their tax regimes, Toyota is no saint either. One of the global leaders forgot to use their strategic consultants over the market governance. Toyota is a major player in North America and Parts of Europe as well as Asia Pacific. Now, the scenario differs from region to region along with the buying power of the consumer. For instance, their bread and butter models like the Corolla have been a massive success in the US and Canada whereas they were a premium models for developing countries like India. The managent should have taken wise decisions by introducing better entry level models in such countries instead of trying to milk their existing portfolio. I am amazed by the fact that this is the same company that played a masterstroke in terms of strategy by ending the production of their renowned and competent product, back in the day (Qualis) when there was a huge demand for it only to create a deliberate void to be filled by their own product (Innova), making it a runaway success.
Well, to reduce their carbon footprint, the company did make a move by collaborating with Suzuki for adding more fuel efficient cars to their portfolio. But really Toyota, you could have performed better. A proper R&D of less than 1 year could have yielded an economic, fuel efficient and safe product that too an entry level one just like other companies including Tata. Your customer base might have still been niche but for sure, you could have avoided this situation.
Again, it is a grown up company and should have acted like one, you cant blame tax regimes entirely for inability in luring potential customers because of lack of offerings...!
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