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Old 15th September 2020, 22:08   #91
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

In Japan, Corporate tax, Local corporate tax, Enterprise tax / special corporate business tax, Inhabitant’s tax etc etc amounting to a total of above 30% effective tax rate is there on corporate income.

VAT / Consumption tax regime for companies there is also quite complex.

As for the GST in India, it is borne by the car buyers and not the manufacturer.

So what is this complaint about taxes?
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Old 15th September 2020, 23:22   #92
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

GST reduced taxes on cars and there are no changes in Road Tax rates, so what is their problem ? Car makers get highly-subsidised land & almost captive labour just so that they can use their technology & manufacture. Now the country isn't even supposed to tax the products they sell at premium prices?

IMO this statement is most-likely in response to the recent topic of capping the tax-deductible royalties that the car makers remit to their parent company. Toyota has Morbidly F-A-T margins on the cars they sell here, while being equipped with FAR lower kit compared to what they sell even in countries like Thailand.

Toyota knows India is in MOST need of foreign investment, hence they're playing dirty and punching down on us. We would need to buckle and delay/cancel legislations that protect our financial interest.

This "story", with all its analogies to being treated like the liquor industry or drugs(!) etc, has not just emerged out of a random journalist query, it surely seems to be deliberately spread through all their PR connections to ensure a negative sentiment is created.

Perhaps India should agree for Great Wall Motors (its Chinese, but technically a privately owned entity) to invest into India as they're keenly interested, instead of blocking them through RBI because of the Chairmans credentials.

We won't because India doesn't want
a) other car-makers to lose to Chinese competition.
b) Chinese tactical investments

Just a few days back Shinzo Abe tweeted that Japan & India would keenly build partnerships so as to keep peace & security in this Indo-Pacific part of the world. Where did all that sense go ?

Last edited by GrammarNazi : 15th September 2020 at 23:51.
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Old 15th September 2020, 23:48   #93
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Quote:
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.
This statement itself confirms that there is no plan to aggressively introduce any new models, other than a rebadged version of Suzuki vehicles. And it is also a nice way to say that the taxes need to be re-looked. I agree with initial statement which says cars are not a sin or luxury product anymore, if India wants to be a developed country.

Other point on taxation shows that we add around 40% taxation on manufacturer price, We pay a road tax 14-18% based on the state we reside on top of the already existing tax (This accounts to 60% tax on the vehicle over manufacturers price) . And then we have new upcoming rules where vehicle is declared obsolete based on its age rather than emission.

Toyota probably is the biggest loser when government announced ev only policy and stopped encouraging Hybrid altogether.
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Old 15th September 2020, 23:59   #94
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Like a few have mentioned, the taxation rules are the same for everyone. A few manufacturers have come and are going pretty well. KIA, MG to name a couple of them. What is hurting Toyota is their high need for Royalties from the parent company. It has to correct prices to stay relevant which will impact the Royalties. So time to grab a few headlines to see if something favorable comes from it.

PS: I am not supporting the high taxation. I am just mentioning the rigid business policy of Toyota India and expecting a government to comply to its needs. In my view, its quite gullible from Toyota to cry hoarse now than re-engineer themselves to be a success than a two product success company.

I will every blame everyone else for my failure except myself.
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Old 16th September 2020, 00:36   #95
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Toyota is a company which wants to price the RAV4 at 65L in India. Let that sink in. 65 lakhs. RAV4 is a Tucson competitor. This is the extent of their detachment from market realities. The likes of Merc GLC, Evoque, BMW X3 and Discovery Sport cost this much, perhaps less.

You can’t complain about your factories being idle when you refuse to launch relevant products and price them properly. Can’t have it both ways.

Toyota wants to cry about regulations. Well, the government allowed the import of 2500 cars a year with no homologation. All German brands have cashed in on this, and are launching their latest products at competitive prices. It is best for business, and certainly best for the customer. What have the Japanese been doing? They are not even trying.

Last edited by Shreyans_Jain : 16th September 2020 at 00:42.
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Old 16th September 2020, 03:22   #96
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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
Toyota is a company which wants to price the RAV4 at 65L in India.
Where did you read this?

As a CBU, yeah sure. That exorbitant price comes as no surprise, Thanks to our well structured import duty charges and policies. There is no way Toyota can get the price down for a RAV4 without building it right down to a component level in India, or, atleast in semi knock down form. In no part of the world does a RAV4 sell for more than a Highlander, forget a Fortuner, so that price seems way over he top.
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Old 16th September 2020, 05:50   #97
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by urbanzameendar View Post
Alright here we go with the official statements:
India and Japan now have strategic interests apart from trade. So the original statement must have created ripples at the highest levels and raised a bit of an eyebrow in Japan.
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Old 16th September 2020, 06:55   #98
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Default re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I will support Toyota for the truth in their complaint. Why should the government tax automobiles at 40/60%? On one hand the government claims that over 2% of the GDP is due to the automotive industry and on the other hand these greedy morons want to tax the golden goose to death. Wait for the clueless FM to add a "covid" tax to everything thanks to her "stellar" handling of the economy. And Toyota is right about protesting on the taxes attached to repatriation of profits to Japan, any company worth its salt is going to enjoy their profits, why would you require it to spend it in the home country? What if the US told all its NRI to spend all their earnings within the USA and placed heavy taxes on any fund transfer to India?
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Old 16th September 2020, 07:45   #99
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According to the article in Mint, the company now says they are investing over 2000+ crore for electrification of vehicles. Well that was a quick u-turn.

The game of the future is electric vehicles and I personally don't think Toyota would want to miss out, even though they haven't really made a dent in electric vehicle category as of yet.

Toyota halts India expansion, blames ‘We Don’t Want You’ taxes-1600222344097.jpg

Last edited by Aditya : 16th September 2020 at 19:11. Reason: Image orientation corrected
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Old 16th September 2020, 08:13   #100
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Quote:
Originally Posted by sandeepmohan View Post
Where did you read this?

As a CBU, yeah sure. That exorbitant price comes as no surprise, Thanks to our well structured import duty charges and policies. There is no way Toyota can get the price down for a RAV4 without building it right down to a component level in India, or, atleast in semi knock down form. In no part of the world does a RAV4 sell for more than a Highlander, forget a Fortuner, so that price seems way over he top.

https://www.team-bhp.com/forum/india...bu-import.html (Toyota RAV4 coming to India as a CBU import)

We have had some very well priced CBUs launched in the country since the 2500 car rule came in. The VW group’s last few launches: the T Roc, Karoq, Octavia RS245 and Tiguan Allspace are all imported via this rule. The T Roc is priced at par with the locally assembled Compass petrol and at a 20% premium over the best selling Creta and Seltos turbo petrol DCT.

Compared with the Korean twins, the extra 2.5L ex showroom (17.5L vs 20L) gets you

- Genuine Euro spec quality: galvanised body, anti corrosion warranties, low VOC plastics. Top notch part quality. Much longer warranties. All round better build.

- Safety: certified 5 star in Euro NCAP vs a deliberately untested product from a manufacturer with a history of de specced Indianised products. Hyundai is not getting any of its new Indian launches crash tested.

- Tech: cylinder deactivation technology

All this without factoring in the higher duties.

Point is, it is totally possible to have well priced imports. People are doing it, it’s not hypothetical anymore. This is what makes Toyota’s pitch of RAV4 for 60-65L laughably absurd. JLR launched the new Defender at 70L ex showroom, full CBU import. Figure that!!

Last edited by Shreyans_Jain : 16th September 2020 at 08:20.
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Old 16th September 2020, 08:31   #101
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Basically from day-1 Toyota India took Indians for granted and they price their products at premium range even for normal vehicles like Innova. Customers are smart and the moment they got alternative they moved away from Toyota to likes of Creata, Compass or any models of KIA. So no surprise, other than Innova, toyota is struggling get a foothold in India for other products.
There are other manufacturers like KIA and others, they are able to grow faster than Toyota on same tax structure.

Toyota needs to think about the pricing of the product and features to stay relevant in Indian market.

Last edited by manjubp : 16th September 2020 at 08:33.
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Old 16th September 2020, 09:28   #102
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Found this article quite balanced and realistic.

Quote:
It is further curious to observe that while Toyota is reluctant to scale its operations, companies such as Maruti Suzuki and Hyundai continue to dominate the Indian market with the same taxation regime. Natural to ask, how is one taxation regime more conducive to Suzuki – another Japanese car manufacturer while Toyota finds it as a bottleneck for its growth? In fact, even as Toyota India finds the tax regime responsible for their lower than normal capacity utilization, several car brands such as Kia and Morris Garages have launched their vehicles and have swiftly captured a decent share of the domestic consumer market.
https://www.livemint.com/opinion/onl...170154000.html
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Old 16th September 2020, 10:03   #103
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

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Originally Posted by creative420 View Post
Well that was a quick u-turn
Well, the damage is already done now. And no amount of tweets or assurances of 2000cr is going to repair the statement that they will not scale up. Looks like the damage control mode was initiated after they had a lot of backlash. I believe India is a market where damage control mode cannot help you much. It's not as if Toyota doesn't have any good products. But for many years they have kept harping on the same Innova and Fortuner milking the two models to death.

Toyota - if you exit India or merge your India operations with any other company, I will not be surprised.

Last edited by W.A.G.7 : 16th September 2020 at 10:05. Reason: Grammar
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Old 16th September 2020, 10:13   #104
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

My Take on this is simple. This statement from Toyota is simply an acceptance that they don’t have any models to address / exploit Sub 4 mtr rule and hence they cannot digest other competitors making profit and sales while Toyota is stuck with its Big Cars vision for India. All they have is the car sharing plan with Suzuki and God only knows what good is it doing for Toyota itself.

Where are the Innovations from them - Hybrids ? PHEVs ? Where is the plan for CKD ? Localization ?

Fact is - whether Indian Taxation system is good or bad is not an issue, it’s the same for all other manufacturers and some of them who have invested are doing really good.

Take Hyundai, Tata, MG, Kia for example - they all have diversified portfolio and they are not complaining.

Now I am not against Big cars from Toyota, these cars are good for sure, however they are exorbitantly priced. The perceived quality levels of Toyota drives the demand mainly.

Now that more alternatives are available for Innova, Fortuner they are worried. This is already reflecting in the sales numbers for August . I can understand the stagnation in demand from commercial sector but it’s a matter of time when the segment moves to value for money alternatives.
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Old 16th September 2020, 10:18   #105
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

While the taxation rules and policies are indeed same for everyone, and that few manufacturers like Maruti, Hyundai and Kia are thriving in this market, the fact that also remains is that these very manufacturers treat India like a third world country. Suzuki and Hyundai sell truly global products elsewhere, and we get heavily 'de-specced' and unsafe versions here. Moreover, products that are part of the starting line-up for a few of these manufacturers in other countries become premium offerings in our country. You'd expect these players, including Toyota, with so much of experience in India, to be a guiding light for the others on how to thrive in the difficult conditions of our country and still be relevant. Instead, what we get is a blind eye and step motherly treatment. Toyota, especially and notably, has not done anything remotely path-breaking except flogging the same old Fortuner and Innova. All their other offerings have been duds. And to top it all, instead of bringing their best selling models outside to our shores, they're shamelessly engaging in badge sharing exercise with a company that's definitely not a poster child for longevity and reliability.

The attitude of such global players, along with our absurd taxation rules, is not helping anybody. We've already seen so many manufacturers pack up and leave already, I'm sure the day is not too far that all that we'd be left with is substandard product offerings from the likes of Maruti, Hyundai and Kia. I firmly believe that we don't have a lot of choices even today, and the situation will only go downhill from here.
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