Toyota previously said that high taxes push cars out of reach for many consumers.
New Delhi:
The government and the Indian unit of Toyota Motors have downplayed the auto giant’s decision against expansion in the country due to the high tax regime. Union Minister Prakash Javadekar tweeted today that Toyota will invest more than 2 billion rupees in the country over the next year. Vikram Kirloskar, vice president of Toyota Kirloskar Motor, confirmed this, saying that the company is “committed to the future of India.”
“The news that Toyota will stop investing in India is incorrect. @Vikramkirloskar has clarified that Toyota will invest more than 2000 million rupees in the next 12 months,” reads the tweet from the Union minister, who is in charge of the heavy industries portfolio. .
The news that the Toyota Company will stop investing in India is incorrect. @vikramkirloskar has clarified that Toyota will invest more than 2000 crore rupees in the next 12 months.@PIB_India
– Prakash Javadekar (@PrakashJavdekar) September 15, 2020
Absolutely! We are investing more than 2000 crs in electrical components and technology for the national client and the export. We are committed to the future of India and we will continue to put all our effort into society, environment, skills and technology.
– Vikram Kirloskar (@vikramkirloskar) September 15, 2020
In an interview earlier today, Shekar Viswanathan, vice president of Toyota Kirloskar Motor, Toyota’s local unit, said that high taxes in the country keep cars out of reach for most consumers. This means factories are idle and no jobs are being created, he said.
“The message that we are getting, having come here and invested money, is that we don’t want it,” Viswanathan said. In the absence of reforms, “we will not leave India, but we will not increase,” he added.
In a carefully worded statement later in the evening, Toyota said it needs to protect the jobs it has created in the country and would rather work to consolidate existing operations.
“During our two decades of operations in India, we have worked tirelessly to build a strong competitive local supplier ecosystem and develop strong and capable human resources. Our first step is to ensure full capacity utilization of what we have created and this will lead time, “the statement said.
He also noted the high tax regime in the country, saying that the auto industry “has been asking the government for support to sustain the industry through a viable tax structure” in the wake of the post-coronavirus economic slowdown.
“We recognize the strong proactive efforts being made by the government to support various sectors of the economy and we appreciate the fact that it is open to examining this issue despite the current challenging revenue situation,” the statement read.
The auto industry has stalled even before the pandemic started due to the economic recession. But a decision against the expansion by a major automaker is likely to hamper the government’s efforts to seek business.
Over the past few months, Prime Minister Narendra Modi has been repeatedly flagging the Make in India initiative and seeking foreign investment, showcasing the government’s efforts to offer investors a better business environment.
In a nod to the government’s efforts, Toyota’s statement read: “Our recent partnership with Suzuki in India to share technology and best practices also supports the ‘Make in India’ initiative and Indian government policy, and aims to improve the competitiveness of both companies. “
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