No! Toyota is not halting expansion in India; top executive confirms plans to invest Rs 20 billion
Toyota Kirloskar Motor stated that it continued to be committed to the Indian market
A news report by a wire agency on Tuesday said Toyota Motor Corporation would not scale up further in India because of the country’s high tax regime. The report, carried by several media outlets, suggested that this was a blow to the Narendra Modi government’s efforts to woo global companies to invest in India.
But the report seems to have been portraying an incorrect picture.
A few hours after the news of Toyota Kirloskar Motor (TKM) blaming the Indian government for “high taxes” in the country started doing rounds on the internet; TKM Vice Chairman announced the company’s plans to invest a whopping amount of over Rs 2,000 crores (Rs 20 billion) in domestic production in the country.
“We are seeing the demand increase & the market recover slowly. The future of sustainable mobility is strong here in India and Toyota is proud to be part of this journey. We are investing 2000+ crore towards the electrification of vehicles," TKM Vice-chairman Vikram Kirloskar said in a tweet.
We are seeing the demand increase & the market recover slowly. The future of sustainable mobility is strong here in India & Toyota is proud to be part of this journey. We are investing 2000+ crs towards the electrification of vehicles and helping build a strong India!— Vikram Kirloskar (@vikramkirloskar) September 15, 2020
Earlier, there was a report by wire agency Bloomberg’ quoting vice chairman of Toyota’s local unit Shekar Viswanathan saying that the company won’t exit India but won’t scale up as well.
“The message we are getting after we have come here and invested money is that we don’t want you,” the report quoted Viswanathan as saying.
Bloomberg’s report, slamming the Indian government’s high tax regime for automakers in India, was carried by many media outlets.
However, the statement issued by TKM a few hours later told a different story. It pointed to the company’s plans to remain “committed to the Indian market.”
“Toyota Kirloskar Motor would like to state that we continue to be committed to the Indian market and our operations in the country is an integral part of our global strategy. 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 ecosystem 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.” the company said in a statement.
No doubt, the auto sector has been hit hard by the Covid-19 pandemic. But the government is looking into automobile industries recommendation for a reduction in Goods and Services Tax (GST) rates by 10 percent across all categories of vehicles, Javadekar had earlier revealed.
Recently, finance minister Nirmala Sitharaman also said that the GST Council will look into the proposal of lowering the GST on two-wheelers.
TKM also showed confidence in the Indian government and said that they are sure that the government will do everything possible to support the auto industry and employment.
“In the wake of the slowdown that has been exaggerated by the COVID-19 impact, the auto industry has been requesting the government for support to sustain industry through a viable tax structure. We remain confident that the government will do everything possible to support industry and employment," the statement read.
Furthermore, Union Heavy Industries Minister Prakash Javadekar took to Twitter to confirm the news calling the previous reports claiming TKM’s plans of halting expansion in India as “incorrect.”
“The news that Toyota Company will stop investing in India is incorrect. @vikramkirloskar has clarified that Toyota will invest more than Rs 2000 crore in the next 12 months,” Javadekar tweeted.
Replying to Javadekar’s tweet, Kirloskar said, “Absolutely! We are investing 2000+ crs in electric components and technology for the domestic customer and export. We are committed to the future of India and will continue to put all effort in society, environment, skilling, and technology,” further confirming the company’s plans.
Absolutely! We are investing 2000+ crs in electric components and technology for the domestic customer and export. We are committed to the future of India and will continue to put all effort in society, environment, skilling and technology.— Vikram Kirloskar (@vikramkirloskar) September 15, 2020
Toyota began operating in India in 1997. TKM is a joint venture between Japanese Toyota Motor Company and Kirloskar Group and is one of the largest automakers in the country.
With TKM’s positive statement coming just a few hours after Bloomberg’s report, it could be said that the earlier report was nothing but mere propaganda to slam the Indian government.