Toyota stops expansion plans in India, blames high tax regime

Agencies
September 15, 2020

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Mumbai, Sept 15: Toyota Motor Corp. won’t expand further in India due to the country’s high tax regime, a blow for Prime Minister Narendra Modi, who’s trying to lure global companies to offset the deep economic malaise brought on by the coronavirus pandemic.

The government keeps taxes on cars and motorbikes so high that companies find it hard to build scale, said Shekar Viswanathan, vice chairman of Toyota’s local unit, Toyota Kirloskar Motor. The high levies also put owning a car out of reach of many consumers, meaning factories are idled and jobs aren’t created, he said.

“The message we are getting, after we have come here and invested money, is that we don’t want you,” Viswanathan said in an interview. In the absence of any reforms, “we won’t exit India, but we won’t scale up.”

Toyota, one of the world’s biggest carmakers, began operating in India in 1997. Its local unit is owned 89% by the Japanese company and has a small market share -- just 2.6% in August versus almost 5% a year earlier, Federation of Automobile Dealers Associations data show.

In India, motor vehicles including cars, two-wheelers and sports utility vehicles (although not electric vehicles), attract taxes as high as 28%. On top of that there can be additional levies, ranging from 1% to as much as 22%, 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%.

Ford, GM Out

The additional levies are typically imposed on what are considered to be “luxury” goods. As well as cars, in India that can include cigarettes and sparkling water.

India is planning to offer incentives worth $23 billion to attract firms to set up manufacturing, people familiar with the matter said last week, including production-linked breaks for automakers. International automakers have struggled to expand in the world’s fourth-biggest car market.

General Motors Co. quit the country in 2017 while Ford Motor Co. agreed last year to move most of its assets in India into a joint venture with Mahindra & Mahindra Ltd. after struggling for more than two decades to win over buyers. That effectively ended independent operations in a country Ford had once said it wanted to be one of its top three markets by 2020.

Such punitive taxes discourage foreign investment, erode automakers’ margins and make the cost of launching new products “prohibitive,” Viswanathan said.

“You’d think the auto sector is making drugs or liquor,” he said. Toyota, which also has an alliance with Suzuki Motor Corp. to sell some of Suzuki’s compact cars under its own brand, is currently utilizing just about 20% of its capacity in a second plant in India.

Automobile sales in India were weathering a slump before the coronavirus pandemic, with at least half a million jobs lost.

Taxes on electric vehicles, currently 5%, will probably also go up once sales increase, Viswanathan said, referring to what he says has become a pattern with successive governments in India.

While discussions are ongoing between ministries for a reduction in taxes, there may not any immediate agreement on an actual cut, India’s Heavy Industries Minister Prakash Javadekar said earlier this month.

A finance ministry spokesman didn’t immediately respond to messages seeking comment.

EV Challenge

Automobile sales in India were weathering a slump before the coronavirus pandemic, with at least half a million jobs lost. A lobby group has predicted it may take as many as four years for sales to return to levels seen before the slowdown.

The biggest players are the local units of Suzuki and Hyundai Motor Co., which have cornered the market for compact, affordable cars. Maruti Suzuki India Ltd. and Hyundai Motor India Ltd. have a combined share of almost 70%.

Toyota in India has largely pivoted toward hybrid vehicles, which attract taxes of as much as 43% because they aren’t purely electric.

But in a nation where few can even afford a car, let alone a more environmentally friendly one, EVs or their hybrid cousins have yet to gain much acceptance. Elon Musk, the billionaire founder of Tesla Inc., has said import duties would make his vehicles unaffordable in India.

 

“Market India always has to precede Factory India, and this is something the politicians and bureaucrats don’t understand,” Viswanathan said. Modi’s much-touted Make in India is another program aimed at attracting foreign companies.

 

India needs to have demand for a product before asking firms to set up shop, yet “at the slightest sign of a product doing well, they slap it with a higher and higher tax rate,” he said.

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News Network
February 5,2025

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Mangaluru: In a heartfelt farewell, the Govt Muslim Residential School near Deralakatte bid an emotional goodbye to Manjunath Bhat, a mathematics teacher who dedicated 29 years of his life to shaping young minds. The event, held on Monday, was organized by the school and its alumni association as Bhat prepares to retire in March.

Poornima, district officer from the minority welfare department, praised Bhat’s unwavering commitment. “Serving at the same institution for 29 years is no small feat. It speaks volumes about his dedication,” she remarked.

His colleague, Mohammed Haneef, reflected on Bhat’s exemplary service. “Teaching Muslim children for nearly three decades, he never faced a single complaint. He is truly a model teacher. Post-retirement, he plans to take up farming in his village,” he shared.

Mohammed Anwar AS, president of the alumni association and professor at Yenepoya Medical College, expressed deep gratitude. “No matter how far we go, we must always remember our teachers. I owe my success, in part, to educators like Manjunath Bhat,” he said, recalling cherished memories from his school days.

Overwhelmed with emotion, Bhat addressed the gathering, saying, “I never expected such a grand farewell. My bond with my students is unbreakable, and this event is a testament to the strength of that connection.”

The farewell was presided over by school principal Umarabba, who lauded Bhat’s dedication. “He has been a pillar of this institution, recognized as a model teacher who served with diligence, regardless of the challenges faced,” he noted.

The celebration saw alumni and dignitaries honouring Bhat with valuable gifts, including a gold ring. His wife, Sahana, and children, Srivatsa and Sindhoora, stood by his side as he was showered with love and appreciation—an unforgettable tribute to a teacher whose legacy will live on in the hearts of his students.

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coastaldigest.com news network
February 12,2025

Mangaluru: Dakshina Kannada MP Captain Brijesh Chowta has urged Chief Minister Siddaramaiah to prioritize increased investments in Mangaluru during the upcoming Global Investors Meet for Coastal Karnataka. He emphasized the region’s immense potential for sustainable industrial growth.

Coastal Karnataka’s Strengths

The MP highlighted Coastal Karnataka’s skilled workforce, premier educational institutions, and strong entrepreneurial ecosystem, making it an ideal destination for industrial expansion.

With its strategic location, excellent port connectivity, and robust infrastructure, the region is particularly suited for industries in R&D, Global Capability Centers (GCCs) - IT and ITES, fintech, renewable energy, marine biotechnology, tourism, and food processing.

Challenges Hindering Growth

Despite these advantages, the MP acknowledged challenges such as youth unemployment, migration of skilled talent, and a lack of large-scale industrial investments. He urged the government to take concrete steps to address these issues.

Proposed Investment Initiatives

To harness the untapped potential of Coastal Karnataka, he requested the CM’s support in:

•    Establishing an IT and startup hub to leverage the region’s large talent pool, boost entrepreneurship, and curb brain drain.

•    Facilitating investments in GCCs and R&D centers, capitalizing on the region’s skilled workforce.

•    Setting up a technological innovation park in Mangaluru to attract investors and institutions.

•    Enhancing New Mangalore Port and developing an integrated coastal economic zone to encourage global trade and manufacturing.

•    Supporting sustainable fisheries, marine research, and ocean-based industries.

•    Encouraging investments in eco-tourism, wellness retreats, and adventure tourism to drive economic growth.

The MP stressed that proactive government intervention in these sectors would significantly boost the region’s economy, attract industries, and create employment opportunities. The proposal is now under consideration.

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News Network
February 5,2025

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Americans have taken to the streets in Washington, D.C., protesting President Donald Trump’s scheme to take "long-term ownership" of the Gaza Strip.

“Gaza Strip is not for sale,” the protesters shouted on the city’s streets on Wednesday.

Speaking at the White House on Tuesday alongside Israeli prime minister Benjamin Netanyahu, Trump had claimed that the United States would oversee clearing up of destroyed buildings, removing of unexploded ordnance, and “resettling” of Palestinians elsewhere.

"The US will take over the Gaza Strip, and we will do a job with it too. We’ll own it," he had purported.

‘Deploying American troops to Gaza’

Trump’s announcement came after the Israeli regime failed to realize its objective of forcing Gaza’s entire population to leave for neighboring Egypt, despite taking the coastal sliver under a war of genocide for over 15 months, during which the regime killed way upwards of 61,000 Palestinians, mostly women and children.

Despite offering few details on how the scheme would be implemented, Trump suggested that displaced Palestinians could be sent to "other countries of interest with humanitarian hearts."

He also left open the possibility of deploying American troops in Gaza, stating, "If it’s necessary, we’ll do that."

‘New Riviera’

Trump predicted the war-ravaged Gaza Strip, home to more than two million Palestinians, could become “the Riviera” of the West Asia as he announced his plan to take control of it.

"The Riviera of the Middle East. This could be something that could be so magnificent," Trump said as he again voiced hopes that Palestinians could be removed from Gaza, and said the United States would redevelop the territory.

‘Recipe for chaos’

The so-called plan, which Trump described as a "long-term ownership position," was met with immediate condemnation from Palestinian groups.

The Gaza-based Palestinian resistance movement Hamas called it a "recipe for chaos and tension in the region" and vowed that "our people in the Gaza Strip will not allow these plans to pass."

The group’s denouncement came amid predictions that the proposal could escalate tensions in the region and spark new waves of resistance across the Palestinian territories and beyond.

Some regional states, including Saudi Arabia, likewise firmly rejected any attempt to displace Palestinians, citing the Palestinian nation’s demand for establishment of their own independent state.

Trump’s comments also drew criticism from various activists and experts. Omar Baddar, a political analyst, slammed the announcement, saying, "He’s essentially declaring the destruction of Palestinian society and the scattering of its people."

American congresswoman Rashida Tlaib called out Trump for "openly calling for ethnic cleansing."

International law experts and human rights organizations have, meanwhile, raised concerns over the legality of Trump's proposal, warning that forced displacement and foreign occupation of Gaza would violate numerous international treaties and conventions.

"This plan disregards the rights of the Palestinian people and sets a dangerous precedent for unilateral land grabs," said Abed Ayoub, executive director of the American-Arab Anti-Discrimination Committee (ADC), a US-based civil rights organization.

Netanyahu, however, praised Trump as "the greatest friend Israel has ever had" and suggested that the scheme could "change history."

The ICC-wanted Israeli official’s trip to the US has already conjured up strong denouncement on the part of various regional and international organizations, figures, and groups over war crimes and crimes against humanity in Gaza.

Separately, Trump cast doubt on the stability of a ceasefire agreement between the Israeli regime and Hamas that is expected to end the genocide.

"The [Israeli] strikes could start tomorrow. There’s not a lot left to strike," he said amid Tel Aviv’s regular violations of the deal.

He also alleged that the “American-led plan” would lead to the war-wracked Palestinian territory’s “transformation.”

Critics, though, have argued that Trump's proposal could be intended to divert attention from ongoing controversies surrounding his administration, while US Senator Chris Murphy has called it a "reckless distraction from domestic issues."

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