Toyota Motor Corporation in a statement said that it won’t go for any further expansion in India lending a blow to the Government of India’s hopes of luring global companies to offset the economic losses caused by the Covid-19 pandemic.
The government has been offering incentives to the tune of $23 billion to attract firms to shift their manufacturing base to India. Shekhar Viswanathan, vice chairman, Toyota said that taxes on cars and motorbikes in India are very high that companies find it difficult to build scale. The high levies also lure off customers from purchasing cars leading to situations where factories are idle and there are no new jobs.
Viswanathan added that the message the company was getting is after we have come here and invested money, is that we don’t want you. Toyota, one of the world’s largest automobile manufacturers began their India operations in 1997. The company manufactures cars, two-wheelers and sports utility vehicles in India.
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%. Additional levies are also imposed under “luxury” goods. Automobile sales in India were having a general slowdown before coronavirus outbreak and the demand for Toyota cars is lesser compared to Maruti Suzuki for example. Auto industry is slowly picking up as industries have restarted their operations in a calibrated way.