Toyota Kirloskar Motors India, one of the popular automotive companies worldwide and in India known for its cars like Innova, Fortuner, and Corolla, has decided to halt its India expansion due to various reasons. One of the major reasons is the Tax regimes in India.
Toyota Motor Corp will not expand further in India due to the country’s high tax regime, a blow to Prime Minister Narendra Modi, who is trying to compensate global companies for the deep economic decline brought on by the coronavirus epidemic. The government has placed taxes on cars and motorbikes so high that companies find it difficult to manufacture them, said Shekar Viswanathan, vice president of Toyota Kirloskar Motor, Toyota’s local unit. He added that the high recoveries made the car inaccessible to many consumers, meaning that factories are useless and jobs are not created.
After the message Toyota got, They stated “Toyota has come here and put money, don’t we want you.” In the absence of any reform, “We will not get out of India, but we will not be on a large scale.”
Toyota, One of the world’s largest carmakers, in 1997 it started operating in India. Its local unit is owned by the Japanese company at 89% and has a small market share – just 2.6% in August versus about 5% a year earlier, Automobile Federation Dealers Association data show.
Toyota says rising taxes have kept cars out of reach of many consumers in India, motor vehicles including cars, two-wheelers and sports utility vehicles (although not electric vehicles), attract taxes as high as 28 percent. On top of that, there can be additional levies, ranging from 1 percent to as much as 22 percent, based on a car’s type, length, or engine size. The tax on a four-meter long SUV with an engine capacity of more than 1500 cc works out to be as high as 50 percent.
To top it all, India’s automobile sector has been witnessing a fall in sales since the previous financial year. The situation has been compounded by the pandemic-induced lockdowns and economic slump. After near-zero sales in April, the sales have begun to recover gradually.