Bangalore: Due to the high tax regime in India, Toyota Motor Corp. won’t expand further in the country. The government keeps taxes on cars and motorbikes so high that companies find it hard to build scale. The high levies also put owning a car out of reach of many consumers.
“The message we are getting after we have come here and invested money is that we don’t want you,” Viswanathan, vice chairman of Toyota’s local unit, Toyota Kirloskar Motor, 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.
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%.