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Old 16th September 2020, 10:33   #106
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Oh really!
What about launching sub standard old products WAY behind competition?
What about selling a Honda City competitor (Yaris) at 13 lacs on road with no alloys? (Was shocked to see it while I had to help my father choose between Yaris/City in 2018, went with City of course).
What about selling re-badged crap in the form of Glanza and Urban Cruiser?
What about selling almost NONE of the countless automobiles they have on sale in other countries?
What about falling on their faces in the small car segment (Etios/Liva)?

Classic case of grapes are sour. Like, come on. Even I can see it.
They put no efforts in, peddle their exorbitantly priced marquee models which are good but not without their flaws and far from perfect, cash on their 'reliable' image without even trying for improvement.

I'd say, pull up your pants. India is a big boys market.
The taxes are same for everyone else.
Automotive manufacturers fail here everyday and often they're too stupid to even see the reasons for their failures. Toyota is acting just the same, I expected better from such a respectable Japanese corporation.
Also, they need to hire better people too. This is stupid talk hour going on over here. Amateur hour. Come on mate! I hope the corporation's attitude in general is not represented by this sole person.
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Old 16th September 2020, 11:33   #107
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

As long as there is high levels of income tax evasion, there will be high levels of taxes on consumption. Nobody supports any kind of enforcement in this country, that's just the culture. Salaried guys get screwed over twice and that's just the way it is.

Toyota has no interest in exports, they are only interested in the Indian market and the royalties. There is an element of rent seeking here, and a complete lack of alignment with the Government's push for exports. Every country treats their domestic market as a strategic asset -Japan, Korea and China are downright protectionist. It's only now that India has begun to even think on similar lines. No self respecting government would brook such criticism and looks like Toyota got a kick in the backside, that's why the U-turn.
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Old 16th September 2020, 11:37   #108
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Toyota statement makes absolutely no sense since the taxes across the board for all local manufacturer are same. Is this statement to hide their errors and failure to grow?
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Old 16th September 2020, 11:42   #109
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

This was always on the cards ...

The Japanese firms both Toyota and Honda did not show the intent to succeed in Indian market and made horrible mistakes with product choices, pricing, positioning. India is not the easiest place to do business but firms with lesser pedigree like Hyundai have succeeded and Kia now.

I also heard from one of my friend at Toyota that they had big plans with hybrid and were intending to invest heavily on the same. The governments change of policy towards electric caught them completely off-guard.

Now they are left to slap their illustrious badge on Maruti's low cost cars. Whatever happened to bullet-proof reliability
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Old 16th September 2020, 12:02   #110
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Frankly, even if I was looking at a business, I wouldn't invest. High GST is one of the factors, Income tax, Taxes on dividend, Import restrictions from China, Flipflop policies on Hybrids & Electrics, make it very pathetic country to deal with. Add to to that market uncertainty, as a pure business decision, it would be a no. Now you can all Ratan Tata and say a promise is a promise and still go ahead with a project like Nano. But you need a large heart for that and an emotional connect to go heart over head.
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Old 16th September 2020, 12:15   #111
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

It's us and not companies who need to cry about tax system as we only paying all the taxes from our own pocket. Rules are same for all, Indian or Foreign manufacturer's, so no need to crib about it. Toyota clearly finding reasons to hide their mistakes and failures, no doubt in that. In reality, situation is in favor of Toyota. People want them to bring good cars so that they can buy Toyota. But what people got is highly expensive Innova and Fortuner mainly. Nothing in small car, premium hatchback, sedan, small-mid size SUV space. Then why complain Toyota?

It reminds me about student failing in exams because of lack of study, hard work and now complaining, blaming whole examination system for his failures !!

Last edited by aniketi : 16th September 2020 at 12:17.
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Old 16th September 2020, 12:18   #112
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I am sure the timing of the pandemic hasn't helped Indian top brass in the automotive sector. Sales were down earlier because the economy was on a downward spiral anyway. The Pandemic gave Nirmala Tai the "Act of God" excuse to blame the economic woes on the pandemic.

Toyota makes great cars globally. But they've been behind the 8 ball in every market behind the Korean upstarts, losing market share in mature markets and just not keeping up in newer markets.

Indian bureaucrats make the policies which are absurd irrespective if the Govt. in power. It's not news. Every Govt in India has some socialist tinge, almost being averse to pleasing those with money. At least publically. It's the theater of the absurd with those same politicians jetting around in planes and choppers owned by industrialists during election rallies.

So Toyota can either live in the contradictory economy that India is by adapting or it can keep ceding ground to the Korean and Indian makers. Or their Japanese counterparts in Suzuki.

But yea, high time Government makes sensible policies but that's true across all sectors. Till people are more concerned about which Bollywood chap smoked how much weed and renaming of towns/villages etc., nothing is going to happen.
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Old 16th September 2020, 12:28   #113
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I do not agree with Toyota here just because of the fact that there is a level playing field. If you invest in manufacturing here, you are treated same as a domestic car maker.

The problem arises when you cannot justify local production of parts due to low numbers, which indicates the mass market is not ready for the product/price range. I don't think government reducing tax to make cars cheaper is a solution here. Consumer will start consuming more expensive products when his spending capacity and his income increases. You have to be patient Toyota.

India has certain rules that makes non-compact cars costlier. But i believe Toyota, which comes from the land of 'kei cars' should not be complaining about rules promoting compact cars. They should rather make cars specifically for the market rather than just bring cars designed for other markets here. Their attempts at mass market cars (Etios and Liva) were reasonably successful. I mean they found(rightly) many homes despite being as desirable as a cabbage. Toyota should have used the Etios platform to make more desirable cars and compact SUV. Selling maruti's as toyota will gradually erode the Toyota's brand value in India.

To me it sounds like Toyota is not interested in catering to the Indian mainstream market.
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Old 16th September 2020, 12:32   #114
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I believe that there are two parts to the problem: Toyota not able to crack Indian market AND GOI policy framework.

Toyota failed in its strategy with Etios/Liva getting flopped while other entrants like Hyundai and Kia managed to have a foothold in Indian market. So it's a fair statement that Toyota played its cards wrong since the constraints were same for every player.

But Toyota's failure and Hyundai's success should not take away the shambles of policymaking that GOI does. Any business needs to have predictability guaranteed for the investment to flow in seamlessly. Strategies moves on roadmaps and we are on the cusp of a transition to electric energy. For all the flip flops, this factor alone gives a fab opportunity for GOI to undo all the previous wrongdoings.

On the automotive side, if India wants to be a multibrand market rather than 3-4 top brands ruling the roost, a good policy framework is the basic need. Else while a certain Kia may be able to create a success story but the number of such successes will be too far and few. This in turn impacts the health of whole marketplace then.

To conclude while Toyota's failure is part of its own failed strategy, but it is also symptomatic of the fiasco that the policy framework is.
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Old 16th September 2020, 12:43   #115
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Toyota aside, there is no question that policy framework in India is totally ad hoc. Look at any sector and you will see this.

Most regulations are also designed to advance 'rent seeking' - a fancy social science name for corruption. GoI's Make In India policy have no connection with reality. I can give you very real examples of this.

Finally, we need a proper examination of how our regulatory agencies/policy makers have a well pronounced tendency to pick winners/losers. TRAI's role in enabling the rise of Jio by completely switching its old regulations is a well documented example. The reason Silver Lake and others are lining up to invest in Jio is an acknowledgment of Mukesh Ambani's prowess in managing policy no matter the government in power. This is a huge bet as Bloomberg articulates very well.

Finally, just as Auto journalism in India is a scandal (as Team BHP has well documented), the bigger scandal is business journalism!
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Old 16th September 2020, 12:52   #116
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

Posting after a long time. I agree with a lot of point being said in this thread and still disagree with Toyota and feel that they are complaining. I agree that the taxes are very high as a consumer and that the taxes need to be rationalized but then why isn't the high taxes stopping companies like Hyundai/Kia etc from investing and why only Toyota has a problem.

Some absurd things which i do not like
- sub 4 meter and 1200 cc rule. Govt should have let the market decide what length someone wants to buy and not force manufacturers to create certain kinds of cars. As discussed in the thread some very ugly and unsafe cars have resulted from this (look at the bumper sizes in these cars almost non-existent). But then manufactures still manufactured ugly and unsafe vehicles like HM RTV even w/o the sub 4 mt rule.
- 10 year diesel and 15 year petrol vehicle lifespan in metros. majority of People in India spend lifetime of savings for buying a car and then are forced to dispose it of in 10/15 years. Look at Europe/US - as long as the vehicle is roadworthy (assessment every 3 years in Europe) once can keep the vehicle running. Does the government think that people in metros have unlimited money?

Some thoughts
- buying cars has become very easier due to the availability of loans and housing has become unaffordable. - People buy cars without even owning a house or owning a parking slot. So govt comes out with 4 metre rule to stop overcrowding of cities instead of making a rule making parking slot compulsory for buying a car so as to not displease its vote bank or the car manufacturers.
- limit the lifespan of vehicles and make the manufactures happy (and fill govt coffers as a result of high taxes) since people will be forced to buy new cars. on the contrary - had the govt made a rule of car re-assessment every 3 years - people would find via media of ensure that their ill maintained cars passed these assessments and a whole ecosystem would have spawned given the Indian scenario.

Some parting thoughts
- Rationalize taxes on vehicles
- Promote Clean transport
- Scrap the 10/15 year rule
- make parking compulsory for buying any vehicle
- Assess road driving behaviors and implement penalties for unsafe driving
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Old 16th September 2020, 12:57   #117
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

While I agree that the taxation on cars in India is extremely high, those are "rich" words coming from Toyota which was a 1-horse company for its first decade in India (Qualis, then Innova) and a 2-horse company for the second (Innova-Fortuner). Aside, they launched old & outdated models in India (Liva, Etios), the Toyota Corolla (conveniently discontinued), the Camry (love the new one) and some overpriced CBUs (think Prado @ 1.25 crore rupees).

Toyota never brought its latest hatchbacks, sedans & crossovers here (despite a boom in crossovers), nor its latest technologies to the volume segments. Heck, they were selling a 1.4L diesel in a 20-lakh car! But my real question is, should Toyota be disappointed with India or should India be disappointed with Toyota? As someone who reasonably understands the automotive scene, I have to go with the latter. If Vishwanathan wants to know the meaning of "aggressive investment", he should probably look at a newcomer like Kia.

Whatever the taxes might be, it is a level playing field for all car manufacturers. Toyota failed at gaining any further market-share and thus, dipped into its bank balance to buy a stake in Suzuki (brilliant move, by the way).

If Maruti or Hyundai were to make such statements, I would put more weight on them. But coming from an organisation that has been absolutely LAZY in India, I'm going to .

Quote:
Originally Posted by Aditya View Post
Toyota has released a statement today on its commitment to India
The later statements just appear to be a u-turn, after Toyota realised the firestorm that the original statement created. Well, if you say something, stick by it. If not, admit your mistake.

My other question to Toyota is, just what kind of investments are they putting on hold? What kind of mega investments did these 2 world-class, all-new, engineered-from-the-ground-up cars by Toyota's advanced R&D labs require?

Ah, so it's basically going to be 2 employees less to stick "T" badges on Maruti cars. I shudder at the thought of how it will impact India's GDP:
Toyota halts India expansion, blames ‘We Don’t Want You’ taxes-1.jpg

Toyota halts India expansion, blames ‘We Don’t Want You’ taxes-2.jpg

Last edited by GTO : 17th September 2020 at 07:14. Reason: One more point
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Old 16th September 2020, 12:57   #118
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I understand the overall enthusiasm to get better products into the country.

However, when an Auto major from overseas says that they are investing, please note that the only investment is Land and Building. This is the only direct benefit to the local economy.

The entire manufacturing line (which forms the bulk of the project cost) is usually from the parent country. No Indian manufacturer stands a chance against these foreign suppliers. I know this from my personal experience working with all Auto majors.

How are we supposed to go forward and be self reliant if we do not even stand a chance to be part of any engineering supply or tech advances, even though we are capable of delivering the required quality.

So my take is "we want you, but we also want you to take us along for the ride"
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Old 16th September 2020, 13:14   #119
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

The kind of pricing Toyota has been putting on the cars is insane. There is only so much they can milk their reliability creds. They are facing competition from both the ends. Likes of Kia nibbling away their market share in small car section. And then there is Tesla and the EV revolution in general.
They have not been able to crack the market. It is as simple as that.

Regarding the goverment policies, let us remember that making it too easy for the business also has its social costs. Believe it or not, the emissions standards of India are tougher than that of Australia !! This is a world we live in. On one side goverment has to take a stand for greater good against the corporations. And on other had saturated campaigns against radical changes by the corporations.

Sometimes I feel that approach of Toyota to India reeks of the approach Apple had (has?) for India.

Last edited by download2live : 16th September 2020 at 13:27.
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Old 16th September 2020, 13:16   #120
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Default Re: Toyota halts India expansion, blames ‘We Don’t Want You’ taxes

I do not really understand the logic of Toyota here, especially in claiming that India has 'Toyota we don't want you' tax. Let's look at their argument w.r.t. their competition -

1. As repeated by multiple members before, Toyota's competitors are thriving despite facing the same tax structure.
2. Competitors, by the virtue of their product quality and choices offered to customers, are making good volumes as well. Heck, even newcomers like Kia are selling really good numbers.
3. Question is why Toyota is not able to enter the market segments where these volumes and numbers are. Despite everything, except VW, all players coming to India have at least tried to bring India specific products and have stayed relevant in the market to varying degree of success. All we have seen from Toyota are half-hearted attempts which offer no real value to the customer except for the T badge.
4. If Toyota had said that we have not been able to figure out Indian market and hence, we are not scaling up, people would have gladly accepted. GM did the same, rolled over belly up and left the market.

Now let us look at government policies -
1. GST - was coming for a long time. Implementation was a mess, but we cannot say it affected Toyota so significantly that GST is the only reason for their current state. Moreover, Toyota's bread-winners like Crystas and Fortuners selling at prices upwards of 25L ARE luxury goods. There is nothing wrong in taxing them at higher rates.
2. Emission standards - BS4 to BS6 change was hard. But at least there was no dilly-dallying in it with a firm transition date set. All OEMS had sufficient time to deal with it and all of them were successful launching compliant products before the deadline. Even Indian OEMs like TML & M&M launched BS6 compliant products. Toyota, with their global presence had the tech even before it was made mandatory in India. Coming to costs imposed by BS6 transition, Toyota not having scale in India is bound to increase their input costs. Is it really government's fault?
3. EV policy - Here lies Toyota's real pain. Having invested heavily in hybrids since the 90s, India's sudden decision to skip the step and go for EVs was a big shock for Toyota. Unfortunately their lobbying along with Suzuki did not work and hybrids seem to be heading nowhere in India at least. The electrification targets of the government may be over-ambitious but it is a step in the right direction, not only for reducing the pollution, but also to reduce our crude oil import bill and consequent forex outflow. This decision has been taken with long term strategic vision. Only problem is that government is still not making it clear how it will be implemented and has not laid out any plan for infra development. Let's hope it will happen sooner than later.

Considering all this, I feel Toyota is being nothing but a crybaby here. And coming to investment of 2000+ Cr planned this year, for a big company like Toyota, this looks to me like capital equipment replacement expenditure and nothing related to new development.
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