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Heavy taxation on hybrid cars forces Toyota to halt production of Camry Hybrid in India

28% GST and additional 15% GST has resulted in Toyota Camry Hybrid becoming more expensive that has resulted in low sales which has resulted in stop of production.

Heavy taxation on hybrid cars forces Toyota to halt production of Camry Hybrid in India

Massive slowdown in sales of Toyota Camry Hybrid has forced Toyota Kirloskar to stop the production of its only hybrid vehicle in India from its plant near Bengaluru. The company had invested about Rs 15 crore on the assembly line of Camry Hybrid and about Rs 24 crore on training, campaigns and other marketing activities but post GST the price of the car surged massively with imposition of 28% GST and additional 15% cess on luxury car. This resulted in the price of the car going up from Rs 32 lakh to Rs 39 lakh (Ex-Delhi). Toyota Camry Hybrid production was stopped starting third quarter of the FY 2017-18. In the period between April-September 2017 the company sold a total of 397 units as against 767 units sold in April – September 2017. The local assembly of Camry hybrid began about five years ago and the company later stopped making the regular Camry given the demand for hybrid. The sales have almost dried, with a few cars left in company’s inventory looks like the Camry hybrid will soon be out of Toyota’s India portfolio.

An ET Bureau report says quotes Shekar Viswanathan, Vice-Chairman at Toyota Kirloskar Motor saying,”We don’t have a business case to persuade our parent company in Japan to step up investments on hybrids in Bengaluru, given the punitive tax structure.”

Toyota Camry Hybrid is a strong hybrid and can run on pure electric mode unlike the mild hybrids which are on sale in India. Karnataka state industry minister RV Deshpande had earlier written to union finance minister Arun Jaitley asking that hybrid and electric vehicles be taxed alike. Electric vehicles attract a GST rate of 12%, in line with the government’s intent to make India an all-electric market by 2030.

Globally, Toyota has about 34 hybrid cars in its portfolio and the Camry hybrid could have lead way for more hybrids to come to India, Toyota would have also considered hybrid cars in mass segments however, with nothing from government’s side on hybrid its likely that TKM will too give up hybrids in India. “We wanted to assemble more hybrids that behave like an electric vehicle,” Viswanathan said. “We put an internal combustion engine only to remove any possible range anxiety in users.”

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First published on: 23-10-2017 at 17:52 IST
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