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.
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. The South Asian country is the fourth-biggest car market in the world but international players have struggled to find a niche in a sector that¡¯s dominated by cheap, fossil-fueled vehicles.
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.
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