Japan’s auto giant Toyota Motors Corp said it would not expand its business further in India. The company has blamed higher tax in India for this. This move of the company is a big setback for the Modi government. Prime Minister Narendra Modi has been continuously trying to woo foreign companies to fix the economy that has been damaged due to coronavirus infection.
Shekhar Viswanathan, vice chairman of Toyota’s local unit Toyota Kirloskar Motor, said the government levied more tax on cars and bikes. This tax is so high that it is very difficult for companies to grow their business. He said that due to high tax, many consumers are not able to buy vehicles. This causes no work in factories and no jobs are being created.
We don’t need you
Vishwanathan said in an interview, ‘The message we got after coming here and investing money is that we don’t need you.’ He further said that due to no tax reforms, the company will not come out of the Indian market but will not expand its business.
Toyota is one of the largest car companies in the world. It started its business in India in 1997. The Japanese company holds an 89 per cent stake in its local unit. According to the Federation of Automobile Dealers Association data, the company’s market share in the Indian market fell to just 2.6 per cent in August 2020 from 5 per cent a year earlier.
Luxury tax on car
In India, luxury goods tax is levied on cigarettes like cigarettes, due to which its prices increase considerably. People aware of the matter had told last week that the government is planning to give incentives of $ 23 billion to attract companies to set up manufacturing plants. India is the fourth largest car market in the world but auto companies are constantly struggling to expand their business.
General Motors exited the Indian market in 2017. While Ford Motor also decided to move most of its assets out of India last year. Ford has been trying to woo customers in India for the last two decades in association with Mahindra & Mahindra but could not succeed.