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‘Message We’re Getting, We Don’t Want You’: Toyota Stops Expansion In India Blaming High Taxes

“The message we are getting, after we have come here and invested money, is that we don’t want you,” Vice Chairman, Shekar Viswanathan said in an interview with Bloomberg.

Blaming the high taxes levied on automobiles in India, Toyota Kirloskar Motor has decided to halt expansion.

At a time when Prime Minister Modi is appealing businesses across the borders to scale up production in India, the Vice Chairman of the group has said that owing to the high taxes levied on cars and motorcycles, ownership becomes a problem for customers thereby making it difficult for companies to scale up.

“The message we are getting, after we have come here and invested money, is that we don’t want you,” Vice Chairman, Shekar Viswanathan said in an interview with Bloomberg.

If reforms are not made to the current situation, Toyota may not exit India, but they do not plan to expand either, he further added.

Toyota, according to Federation of Automobile Dealers Associations (FADA), is operational in India since 1997 has a relatively small market share which has also decreased from 5 percent last year to 2.6 percent in August, this year.

As reports suggest, taxes on SUVs are charged as high as 28 per cent, not including the taxes depending on vehicle type, which by itself range from 1 percent to 22 percent.

Vishwanathan stressed that such tax structure makes it “prohibitive” to launch new products as foreign investment becomes more difficult while the automakers’ margins also suffer.

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

 

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