Toyota says committed to India market, industry seeks viable tax structure
September 15, 2020
MUMBAI: Toyota Kirloskar Motor India Pvt Ltd (TKM) on Tuesday said the auto industry seeks a viable tax structure to sustain in the wake of the pandemic-induced slowdown. The company continues to be committed to the Indian market and its operations in the country remain an integral part of its global strategy, the maker of Innova and Fortuner utility vehicles said, clarifying its position on halting its future expansion plans for India.
“We remain confident that the Government will do everything possible to support industry and employment. We recognize the strong proactive efforts being made by the Government to support various sectors of the economy and appreciate the fact that it is open to examine this issue despite the current challenging revenue situation,” the company said in a statement.
Earlier today, a Bloomberg report quoted Shekar Viswanathan, vice chairman, TKM saying that high taxes on cars in India are keep companies at bay from building scale.
“The message we are getting, after we have come here and invested money, is that we don’t want you,” Viswanathan said, adding that while the company does not plan to exit India, it won’t scale up operations either.
After Viswanathan’s comments, the company said, “We need to protect the jobs we have created and we will do everything possible to achieve this. Over our two decades of operations in India, we have worked tirelessly to build a strong competitive local supplier eco-system and develop strong capable human resources. Our first step is to ensure full capacity utilization of what we have created and this will take time.”
Toyota, one of the largest global vehicle manufacturers, does not operate in the volume segment in the domestic market like Maruti Suzuki India Ltd and Hyundai Motor India Ltd.
While Innova is its bestselling model range, Toyota largely operates in the higher price segments that offer low volumes but higher profit margins.
As a result, the company, which has been operating in India since 1997, had a market share of only 4% in India’s 2.7 million unit passenger car market in FY20.
Its popular vehicles Fortuner and Innova attract 43% tax as per the current regime.