[arethusa]

I think the credibility of the article and its source has recently been questioned. Apparently the statement has been pulled out of context (as Indian media regularly indulges) or misquoted.

Here are retaliatory tweets from Minister Javadekar and Mr. Kirloskar

[VPJ74]

Toyota in India is a JV between Toyota Corp and Kirloskar? Do you feel that is responsible for Toyota India's disaster in innovation and new products? Has a JV structure and partners w/ Kirloskar Group been a factor?

JV's are notoriously bureaucratic, unweildy and inefficient. They also constantly squabble over designs, products and everything in general. Think Nissan-Renault fiasco.

Could this be a factor in the underwhelming position of Toyota India aptly summed up by GTO?

[Kosfactor]

Originally Posted by invidious

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.

Socialist Tinge?

The 42nd Amendment of the constitution by Indira Gandhi is a good place to start.

Imagine if Etios twins were stylish, contemporary & VFM - our automotive scene would have been quite different. They essentially made a replacement of Indica and Logan and killed them both by taking over the Taxi segment - also the Tavera - Success!

I think Toyota made a mistake by thinking that they can be a volume seller with a starting price of 22L INR (Yaris isnt worth counting), not suited for a socialist country

[arunvnair]

It would be better to look at the issue directly rather than worrying about who raised it. This is about tax policy affecting demand and thus investment decisions.

Toyota may have raised this topic because of the taxation policy changes in hybrid segment - which would have directly affected their plans. But the larger question is if the taxation policy is helping the industry at large.

I think the real issue is that the taxation policy is acting as a speed breaker for demand growth. As was already posted in the thread, the demand had already nosedived in 2019 and 2020 is practically a washout. Demand is going to remain low for all discretionary spends for some time now (due to COVID) and that along with our prohibitive tax structure might push many car companies out.

In the whole market only 2 companies really make business sense (Maruti and Hyundai/Kia) - can include Tata and Mahindra because of their Indian base. This is precisely because of the volumes they are able to drive. The industry will be helped as a whole if more demand can be generated and the easiest way to do that is to reduce the indirect tax (GST) to something reasonable (12%-18%). If this helps drive demand then the net income for exchequer will also not be significantly affected - in fact it will be increased because of the downstream activities.

This can of course be tied with sane import duties / policies (like the 2500 car rule) which can make product experiments much easier before any manufacture has to commit to large scale product plans/changes.

At the core of it we have to start moving away from the mindset of taxing personal transportation as sin goods.

Whether we like Toyota or not, have to agree that investing in Indian automotive sector with current policies have to be seen as a major risk by global players.

[PrasunBannerjee]

Originally Posted by Himanshu809

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)?

Originally Posted by download2live

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.

Originally Posted by GTO

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!

Not to forget, their most appreciated car, if not their highest selling car (Corolla Altis) had a diesel top variant that used to come WITHOUT AN INFOTAINMENT SYSTEM, just 2 airbags (Petrol had more) and without foglamps that too in 2019. Someone please give me a reason not to be turned off after seeing this when I put in 20 big ones in a diesel car. Quoting myself from a parallel thread.

Originally Posted by PrasunBannerjee

To start with, they are providing only 2 airbags in the Diesel, even basics such as front fog lamps and the infotainment system are available only as an accessory on even the top of the line Diesel, which retails for more than 2 million rupees OTR. Seriously Toyota? Spending more than 20 lakhs and still not getting even a basic infotainment system? That's really a bummer

Probably one of the reasons I haven't seen even a single facelifted Altis in my Tier-3 city, but a lot of facelifted Octavia and the latest Elantra. A lot of new Fortuners, but absolute zero spotting of the new Altis so far.

https://www.youtube.com/watch?v=qAhw...ature=youtu.be

Source: Watch from 1:35 where he says the same.


Agreed, Japanese carmakers are reliable, but then Japanese carmakers are somehow losing focus in Indian markets maybe? Suzuki by not focusing on BS6 Diesel, Honda losing on quality factor and reliability quotient as was a decade ago, steeply increasing pricing, and 'still considering HR-V', and Toyota by not trying to understand what people want (Yaris, Etios twins, eventual fate of Altis, not bringing competent CSUVs from global markets), and Nissan, barely existing. And yes, Isuzu and Mitsubishi which might be identified by coming generations in museums.

Agreed, taxation system is squeezing every drop of blood, but Japs are missing a certain bus, which the Koreans and Chinese (MG) seem to have boarded, and Indian brands aren't too far behind.

I think the govt. should revise taxing and the silly ground clearance based tax, as Indian roads aren't good enough, its potholes at some places and craters in other (heart says Honda City, mind says Bolero, wallet says try walking), followed by the engine based and length based taxing, maybe then some global hatchbacks and CSUVs can come into the Indian markets which otherwise exceed the limit by maybe 20-30 mm but are brilliant products and the manufacturer would have to invest heavily in modifying it to Indian norms. The car market then will surely evolve.

[Jude300]

As somebody mentioned, it is better to look at the fact than to look at where this news comes from.

The taxation policies are absurd and lack a vision or purpose. Everyone agrees to it that in the automobile industry, taxation based on length, ground clearance and cubic capacity don't really serve any purpose.its hard to make a connection between what the government wants to achieve to what it's actually doing to achieve it. Not to get political but in the last few years this has got worse in all fronts. The government seems to have lost track of their own initiatives / agenda and how one policy change is impacting the other.

This lack of clarity in thought and action puts the industry in to frustration mode. To add to the taxation woes, ease of doing business has not got any better.

On a separate note, if you look at the amount of tax you pay on your automobile purchase and maintenance you will be surprised. GST on the car + on insurance + road tax + tax on fuel + Tolls. + GST on your maintenance cost. As consumers too we are burning money to own a car.

[sajanjohn]

While we all should blame Toyota for being so lame in their approach towards Indian automobile industry, there is some truth in the statement . We definitely have room to reduce some tax and make it more investor friendly I guess. More prominent industry leaders seems to agree with this view.
https://twitter.com/kiranshaw/status...167470592?s=21

[aashishnb]

Actually does not sound quite that bad.

He seems to have mentioned that they are investing Rs. 2000 cr. towards electrification and will go ahead with their investments but are not expanding capacity as they feel demand may not increase due to high GST. Their current second plant is at 30% utilization due to GST, so fair point that they don't want to expand capacity.

https://www.business-standard.com/ar...1600092_1.html

[AUTO_ZING]

I think India should quickly graduate to a tax regime where cars cars are taxed for tail pipe CO2 emissions / km. Lower the emission, lower the tax band and conversely, high the emissions, higher the tax band. This will encourage the OEMs to bring cars with hybrid technologies, pure EV's or use high strength steel of alloys to reduce the weight of the cars. For users, this means that cars can be safer and yet more environment friendly.

It's OK to tax the rich, who want to drive cars with high tail pipe emissions. The displacement of the engine has become irrelevant. We could have high capacity engines but extremely fuel efficient and smaller turbo charged engines, which always have a hard time to meet emission norms.

Now coming to Toyota, they have an appalling product line that they have not been able to scale. In fact they stopped Etios, which was still a reasonable product. They are left selling Innova as a staple product and only busy re-badging cars from Maruti. They have no car in their line up that can appeal the young and hence seem to be suffering a serious rejection in the market.

You can be a global company, but the competition is always local. Come on Toyota, you can do better than that!

[mayd85]

Originally Posted by Jude300

On a separate note, if you look at the amount of tax you pay on your automobile purchase and maintenance you will be surprised. GST on the car + on insurance + road tax + tax on fuel + Tolls. + GST on your maintenance cost. As consumers too we are burning money to own a car.

GST is an all pervading tax and there is no list of taxed goods and services. Instead, exempted goods and services form a small 'negative' list. Everything else, everything, can and does get taxed. And it's not like we did not pay any taxes for maintenance of our vehicles before GST. I believe, before GST also we used to pay sales tax/VAT on car, service tax on insurance, VAT and cess on fuel (which we still pay by the way) etc.

[46TheDoctor]

Originally Posted by GTO

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 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 .

Exactly!
We have bought 10 cars in past 15 years in my family but only one of them was Toyota, that too because it was going to be used for our company work and i wasnt gonna drive it ever. Every time i considered buying a Toyota, I could see only overpriced, boring asia specific products lacking poorly in specifications in their indian line up, which always disappointed me. They never bothered to bring their developed world products here at a justifiable price by using the route of local manufacturing despite having such an enviable brand reputation here. Manufacturers need to understand that india is not a Price conscious but Value conscious market and they will see the numbers in any price bracket provided that the product is priced on par with the developed markets and shows good value for money. But, this can only be achieved by locally manufacturing those developed world cars.

[hydraulicsteer]

Toyota is clearly trying to hide its faliure in executing its strategy and vision for India by blaming the tax structure. If the situation is so bad it has to be the case with all car manufacturers but then there are two Korean cousins blazing all guns here. Hyundai-Kia look poised to take number one position in India. Their product portfolio is well spread, pricing exactly matches the target customers’ affordability, market research is spot on and quality is reasonably above average. Toyota on the other hand was happily selling overpriced Innovas and Fortuners just to realise one day they’ve hit a dead end as petrol becomes the choice and EV ecosystem is still far away. Worse is how Toyota is further diluting its brand by selling Balenos and Brezza whose build quality gets exposed every day on all variety of platforms.

[WorkingGuru]

To say that the tax system treats Toyota as drug peddlers is extremely derogatory. No civilised country in the world would allow such statements to pass.

For example, if you wanted a salary raise, would you tell your manager that you're being treated like a drug peddler?

Mind the fact that the words in the statement were chosen intently. And I'm sure such a statement wouldn't have been made without the consent of the other vice-chairmen. IMO it was meant to be a deliberate smear campaign but the deeply nature of the remarks alarmed people of Toyota's opinion. Even R C Bhargava wouldn't use such language!

Industry / people, in the general sense, on the top of their mind wouldn't know in deep detail about the aspects of the car makers, but the extreme analogy used made people think twice before supporting such a statement.

If they think they're just too good for Indian car market, then they're just thankless for the premium prices they've charged & profits earned from here.

[JithinR]

Originally Posted by WorkingGuru

To say that the tax system treats Toyota as drug peddlers is extremely derogatory. No civilised country in the world would allow such statements to pass.

The statement was

“You’d think the auto sector is making drugs or liquor”, Vishwanathan said.

They never said that Toyota was being treated as a drug peddler. Rather that cars were being taxed as a luxury/addictive substance rather than a vital mode of transportation (especially in the current pandemic). My opinion, is that a civilized country is exactly the kind of place that would reflect on this statement and try to address the concerns of industries that promote employment (they get the money...we get the cars and jobs).

But it does seem that in New India, criticism of government policies is now taken as criticism of the country itself.

It seems quite a lot of Indians are thinking with their hearts (or their egos) rather than with their intellect on reading this article and coming to absurd conclusions.

Originally Posted by WorkingGuru

For example, if you wanted a salary raise, would you tell your manager that you're being treated like a drug peddler?

Would just like to point out that most drug peddlers would earn more than the average salaried professional in India. Besides, no taxes on earned income!

[CrAzY dRiVeR]

Originally Posted by arethusa

Here are retaliatory tweets from Minister Javadekar and Mr. Kirloskar

Also his video response to this controversy -

https://youtu.be/REtvR-FZDzU