Business & Economy

After Toyota, Harley Davidson Now Ford also stopped Manufacturing in India

Recently we read the news regarding the Toyota Motor corp had stopped its expansion in India. Because
of the country’s high rate of the tax regime, Prime Minister Narendra Modi tried to lure the global
companies to offset the deep economic malaise that had brought the coronavirus pandemic.
The vice-chairman of Toyota’s local unit Toyota Kirloskar Motor, Shekar Vishwanathan raised his voice
stating that the government of India keeps on increasing their tax rates and that the companies of cars
and motorbikes couldn’t build the scale where they find it hard to manufacture the units. These high
rate taxes reducing the manufacturer of vehicles and job empowerment have also been decreasing with
localities. Toyota, one of the world’s biggest carmakers, began its operation in India in 1997. Its local
units are owned around 89% by the Japanese company and have a small market share of 2.6%.In India,
the tax rate is 28% on cars, two-wheelers, and sports vehicle utilities. In addition to this 28%, there will
be other levies ranging from 1% to 22% based on the type of car’s length, and engine size.
Concerning the above news, even Harley Davidson also decided to stop it’d manufacturers in India. They
don’t expand their business in India anymore because of the huge tax regime. The present government
had been trying to reverse the trend with the plan to offer $23 billion (INR 1656 billion) of incentives to
attract the firms to set up their manufacturing units.
After Toyota and Harley Davidson now it’s time to stop the manufacturer of Ford in India. Ford had
decided to shut down its manufacturing facilities in Sanand and Maraimalai plants, paving the way for
the long-suspected India exit. This will impact the 4000 employees of India. Ford said that they will
support their existing customers and focus on all-electric cars as well as hybrid cars for India via import
route. The reason behind this decision is due to Ford’s lack of profitability. Past 10 years the company
has accumulated operating losses of $2 billion and presently it;’s looking for a sustainably profitable
business in India. Gradually they were going to cease operations from the plants and the entire process
could take years to complete. The president and MD of Ford India, Anurag Mehrotra said that the
decision was reinforced by years of accumulated losses, persistent industry overcapacity, and lack of
expected growth in India’s car market. The CEO of Ford Motor Company, Jam Farley had assured to take
care of existing valued customers in India. The company also confirmed that they are going to offer
some of its niche products like Mustang through the import route and that it will look to bring in new
hybrid and fully electric vehicles like the Marc-E.

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