[cormodore]

While I did not go through all the pages in detail, I did give a glance and echo with most of the statements made by the members.

When KIA can come with all guns blazing, and giving us new products with a host of engine and transmission options, I do not understand this statement made by Toyota blaming the taxes. They should rather take this as a challenge and give us some unique products using their well known manufacturing and frugal engineering methods.

When people are purchasing cars with such high taxes from their Partner (Suzuki) and Koreans, I am not sure what is stopping them to launch their latest portfolio

It will be mostly the the politicians who will be at a loss if at all Toyota decides to leave citing taxes, as they are the ones who purchase their two main strays in India.

I feel its a way to arm-twist the Government to get some benefits or some one in the management of the JV wants to hide their lethargy in front of the top bosses in Japan by making this statement.

[Axe77]

Originally Posted by GTO

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 Aside, they launched old & outdated models in India (Liva, Etios), the Toyota Corolla (conveniently discontinued), the Camry (love the new one) and some overpriced CBUs (think Prado @ 1.25 crore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 .

THIS!! Every word here. Brilliantly articulated Rush.

For all the sales that Toyota has achieved here, as a brand, it has disappointed India. Also, given the immense opportunity in this market, I am surprised top bosses in Toyota have not been questioned on the opportunities "lost" in India by not being more dynamic and aggressive.

[Contrapunto]

https://www.team-bhp.com/forum/india...ml#post4886493 (4th-gen Hyundai Tucson spotted in South Korea) -

This is the Tuscon. In all probability, may land in India in 2021. Toyota , on the other hand, will gloriously unveil the re-badged Ertiga or Wagon R (or something INSPIRING) for all you know.

[landcruiser123]

Originally Posted by GTO

Whatever the taxes might be, it is a level playing field for all car manufacturers.....If Maruti or Hyundai were to make such statements, I would put more weight on them.

Good point about the level playing field by many on this thread. If we're talking about Suzuki, Hyundai, or Kia - can we talk about cheaper (and potentially compromised) platforms? I'm defending Toyota here, but Hybrids and EVs platforms are very expensive.

Toyota has to do some introspection. Hyundai and Toyota started in India around the same time. The Koreans are #2 in India whereas Toyota (which is the superior brand globally) is still relying on 2 cars.

[krishnakarthik1]

Oh is it? Taxes are your problem now? So who stopped your from passing on the same to your customers. Either way they will buy your over priced and out dated cars.

Your real problem is your lack of innovation and talent. Your can argue that companies rebadge cars all around the world but you are Toyota and you should not do it. You should create way for others to follow. If i were an investor in Toyota I would have sold my shares the minute I heard about glanza.

You are not expanding not because you don't want to but because you can't.

[Annibaddh]

Originally Posted by GTO

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!

Whatever the taxes might be, it is a level playing field for all car manufacturers.
.

We have a saying in Hindi..."Khisyani billi khamba noche". The truth is, if the car makers do get it right, the market keeps them rewarded, sometimes even at steep premiums. Fortuner and Innova continue to do well. Ventos and early Skodas did particularly well until they gathered a (deservedly) poor reputation for expensive parts (a nasty pothole had me replacing my alloy for the Vento....VW asked for 24K....for a single wheel ) or pathetic service (every single one of my first three services the car was returned with broken parts in the cabin). Fiesta did well for Ford, as did Figo and EcoSport. Cruz rocked for Chevy. Duster still sells! Superb ruled it's segment. The compass flew off the shelf. Cretas sell by the trainloads as do Kias.

Toyota just continued to not get it right. They expected the ridiculous premiums that Fortuner commands in a super competitive Seg C sedan. They completely and comprehensively missed crossovers in spite of having enough models in their arsenal. It's abominable for them to ring and run. Disgraceful.

Afterthought: The Urban Cruiser is dead on arrival. I'd be shocked if it sells a 500-600 units in a world with Kias and Hyundais and Tatas pulling all stops. I hope the Gravitas buries the Fortuner into the ground too. It'll match Fortuner's butch presence and dare I say surpass it easily. Good riddance.

[toyotaguy18]

Right of the line, I'll make it clear that my understanding of how the auto sector in India works and how govt policies make or break the market is very low, pretty much bare level. However, as a genuine lover of the Japanese brand, wherein I see their positives and negatives, I just want to add my two inconsequential cents.

Firstly, after having gone through all the comments and reading the various viewpoints raise, I'd like to say that I do agree that our taxation policy is pretty unstable and it may look intimadating for any automaker who looks to invest in India. From that perspective, Toyota is very well within their rights to raise concern. Any automaker who invests in a market heavily and feels that it is not well treated will definitely raise concern. And Toyota isnt alone here, other brands such as Porsche, Mercedes, VW etc have felt the same.

However, and now I say this as a long-term Toyota fan, I have always been disillusioned by their Indian arm's trajectory. It all started when they came to India in 1999 with the Qualis, a model plucked out from their South African operations (google Toyota Venture), which was already plucked out from their Indonesian operations (Toyota Kijang).

Toyota had the time and resources to study the market thoroughly and bring in a product that was more relevant, such as the then newly-unveiled Yaris/Echo. I always felt that they couldve come to India with that model because it was optimised for LHD/RHD markets from the onset of its development. However, not doing so reeked of laziness on their part.

And mind you, at the time, used car imports were high and which brand was the most preferred- Toyota. (This is based on my understanding of the plethora of international-market Yotas ive seen in Mumbai) But sadly, the company didnt make the most of this goodwill. Its still weird how they managed with the Qualis tho.

With time, I feel that Toyota just became waaaay tooo comfortable with the Innova/Fortuner when they had every kind of car to offer us. Letting used car importers make money by selling LC 100s when they couldve imported them officially is what I feel was one of their biggest mistakes. And as well-intentioned as the Etios was, the model didn't exude the typical Toyota qualities and was doomed to fail.

Another thing i dont understand is their rebadging effort with Suzuki. As an MNC with a reputation that is envied by other brands, how can you be so careless when you plan to invest in a market thats as big as China, where your portfolio is highly impressive. China's taxation and regulation policy is ever stricter that India's, but Toyota does exceptionally well there.

I have a serious disdain for the Glanza and Urban Cruiser. These names, especially the Glanza, were part of Toyota's impressive heritage, but now seem to make no sense.

However, the company is planning to export these models to African countries, with the Baleno being sold as the Toyota so perhaps there is a method to their madness.

If anything, Toyota can learn from Hyundai-Kia, which is doing incredibly well. Infact, even in the Middle East, which has been a Toyota stronghold, the Koreans have managed to put up a great fight with their impressive and desirable vehicles.

Lastly, from a personal viewpoint, I strongly feel that with their cover-up announcement of the 2,000 crore investment, they should pull up their socks and enter this decade with a new vengeance.

Having grown up in the Gulf, Toyotas have been everywhere and they hold a mighty special place in my heart. I want them to stay in India and bring in their iconic products, esp with the help of the 2,500 rule. Bring in the RAV4 (not at 65lac i mean), the Supra (will work as a halo car), the Land Cruiser J300, and the Corolla Cross, Raize etc

But dont keep on riding on the immense goodwill you have on the back of two vehicles that highly need an all-new refresh, to the point where you ultimately lose away your customers.

[Sebring]

Toyota misread the market and gave us the Etios twins in 2010. If it were to be the superior Yaris twins, at that point in time, they would have simply captured the market. Disillusioned with the tepid response to the Etios, the Japanese giant lost interest in us. They don't want to invest in R&D and try to know the customer anymore. Along the way they realised that Suzuki has cracked it, and all they need to do is slap the 'T' badge on the 'S' cars! This excuse of supposedly 'high' taxes hide their inaction, and only that. I just hope the badges are beautifully engineered and will last long

[octane_100]

IMO looks like a case of sour grapes. AFAIK, the overall taxation on vehicles has not changed significantly over the last 10 years. It's Toyota's inability to crack the volume segment that's more at fault. Also, Toyota may be miffed with the Govt prioritizing EVs over Hybrids with the latter still in the 43% GST slab.

[GTO]

Originally Posted by GTO

But my real question is, should Toyota be disappointed with India or should India be disappointed with Toyota?

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 laboratory 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:

[RaghuVis]

I was going through Twitter when I found this. I might be completely wrong but somehow feel this is tongue-in-cheek reply to Toyota for the storm they created and their subsequent U turn.

PS: Krishna has said no such thing in Bhagvad Gita. Its just a wrong interpretation.

[Hayek]

It is interesting to note that the statements back tracking on what was said were made by Kirloskar, who holds a 11% stake in the Indian entity (which is as good as holding nothing) - remember that Kirloskar has various other businesses and needs to stay on the right side of the powers that be. What Toyota itself clarified was that it remains committed to India - which had also been pointed out by Vishwanathan in his original interview.

I find it amazing that so many people talk of Kia’s success as proof that Toyota’s statement is incorrect. The fact is that Kia benefited from the massive scale that Hyundai’s operations in India give it in terms of indigenising parts. There is no denying that the Seltos is a good car, looks great, came with several variants, was positioned and marketed well. While the Etios was a bad car, and hence flopped - or so the story goes. But we forget that back in 2011, the Etios and Liva Sold about 4,000 units a month each, while the Corolla sold 1,000 units.

Looking at the chart below, back in 2011, monthly car sales ranged from 175,000 units to 235,000 units with an average of about 200,000 units per car.



9 years later, and even ignoring the lockdown months of March to June - and assuming that sales in August are sustainable (and do not merely represent restocking), monthly sales range from 190,000 to 275,000 - with an average of just 230,000 units per month.




So just 15% growth in average sales per month for the industry in nearly a decade - or 1.5% pa growth. In an economy which claimed to be the fastest growing in the world. In the same period, Chinese auto sales rose from 13.7 mm to 21 mm (after peaking at 24 mm in 2018) - over 50% growth on a much larger base

Why has this happened? Largely a function of taxation policies, and we are not talking of import duties on CBUs.

In 2010, excise duty on large cars was 22% and on small cars was 10%. State VAT was high in MH and the Southern States (14%), but relatively low (5% if I recall) in most Northern states. Import duties on components were much lower than they are today. And even in high cost states like Maharashtra, registration cost for cars was 7% vs 14% today. (BTW, it was just 4% in 2004 when I bought my Honda City).

So assuming an ex factory net price of 100, the OTR price (ignoring insurance etc) for large cars ranged from 134 to 148 in 2010, but is now in the range of 158 to 173. Increase in taxes has contributed to a price rise of 18% in OTR prices of large cars.

Further, the customs duties on CKD kits have risen from 10% to 15% in all cases - and to 30% unless you assemble the engine, gearbox AND transmission system in India. So for players targeting the D segment and above, industry sales volumes have not risen in a decade, taxes have risen significantly - and even when you made plans to localise one major component (say engines) to benefit from the 10% duty on CKDs, you get hit by a sudden rise in duties to 15% in all cases - and to 30% unless you localise two more components.

What we also forget is that the Corolla is a Compact Sedan by global standards - yes, you have very expensive Euro hatches which are smaller, but the Corolla is still the largest selling car in the world with sales of over 1.2 million units worldwide. Let’s not diss the world’s most successful manufacturer for stating that inconsistent tax policies make it not worthwhile to invest in our country.

Maruti and Hyundai / Kia together have 75% of the Indian market. For others playing for 2-5% of the market, the scale does not exist to manufacture locally.

In short, our taxation policies are perpetuating the monopoly that Maruti and Hyundai have. Why should Toyota keep investing on its own - and not benefit from the scale that Suzuki has? Why should they invest in anything other than nicely made badges?

[shobhit.shri]

Originally Posted by Hayek

In short, our taxation policies are perpetuating the monopoly that Maruti and Hyundai have. Why should Toyota keep investing on its own - and not benefit from the scale that Suzuki has? Why should they invest in anything other than nicely made badges?

The amazing thing is that Toyota wouldn't have a problem paying any taxes because they would just pass it on to the customers. Their complaint is that the customers are paying too much taxes and are shying away from buying new cars. Even in this forum, almost every day we complain of how cars have become unaffordable in the last decade. The 5 lakh Swift of 2010 is now 10L.

Now, when a manufacturer is showing some spine to tell the reason, the same customers are dissing them. What did I miss in my understanding? Toyota, or that executive in particulal, may have an agenda here, but are they lying?

[46TheDoctor]

Originally Posted by shobhit.shri

The amazing thing is that Toyota wouldn't have a problem paying any taxes because they would just pass it on to the customers. Their complaint is that the customers are paying too much taxes and are shying away from buying new cars. Even in this forum, almost every day we complain of how cars have become unaffordable in the last decade. The 5 lakh Swift of 2010 is now 10L.

Now, when a manufacturer is showing some spine to tell the reason, the same customers are dissing them. What did I miss in my understanding? Toyota, or that executive in particulal, may have an agenda here, but are they lying?

I bought my first car Swift ZXi in 2006 for approximately Rs 6.5 L OTR, today Swift ZXi costs around Rs 8 L OTR which is totally justified given the inflation.

I wanted to buy Fortuner in 2010 (which I eventually didnt buy due to poor ride quality and brakes back then) when it was launched here and it was priced at Rs 20.5 L OTR for a 4x4 MT variant which today is priced at around Rs 40 L OTR. Is this almost 100% rise entirely due to Taxes and Technology?

I agree that Taxes have gone up since then but even with them higher, people are still buying from Suzuki, Hyundai, Kia, Tata, Mahindra, Ford and even the germans like there is no tomorrow!

The real reasons for Toyota's poor performance here are their step motherly treatment to indian market, lethargy, greed and their arrogance that Indians dont deserve their best products at reasonable prices (read locally manufactured) and we must grab whatever they throw at us at whatever inflated prices with complete humility!

[ABHI_1512]

Originally Posted by Hayek

In short, our taxation policies are perpetuating the monopoly that Maruti and Hyundai have. Why should Toyota keep investing on its own - and not benefit from the scale that Suzuki has? Why should they invest in anything other than nicely made badges?

Spot on analysis, add to the taxes is another one and that’s road tax. The road tax has also been increased in almost every state over the years pushing the prices further north. I recently did my road tax renewal and it is the same amount that I paid when I bought the new car five years ago. Go figure !!

Prohibitive taxation is killing a sunrise manufacturing sector that has been painstakingly created over the years in the country and we are more concerned about how KIA has tasted success riding on Hyundai. Also, when a major company speaks, you should listen and judge. But if you want to vilify a company into submission just for speaking out then there is a problem. That Kirloskar had to come out and issue a little clarification tells you how things are taken these days