New Delhi, Mar 27: Carbon-based taxation system has taken precedent across developed nations and it should be considered in India as well to promote electrification and other technologies that aim to reduce vehicular emissions in the long run, as per a top executive of Toyota’s luxury car arm Lexus.
The luxury carmaker, which sells seven models in the Indian market, has also emphasised the importance of a long-term policy roadmap in helping OEMs to commit investments on new technologies and products in a market.
“We have seen in developed nations that carbon-based taxation has taken precedence over any other way to define vehicle taxation policies that we think solves many purposes,” Lexus India President Naveen Soni told PTI in an interaction.
He noted that the government intends to reduce emissions and control the fuel import into the country, while the consumer wants to get better technologies.
“At the end of it, we also want to offer higher and better technologies, which have multiple pathways. As of now, there might be limitations but in the electrified domain, there are multiple pathways. So, if we can have that vision on carbon-based taxation system being crystalised then it gives confidence for us to again commit ourselves towards particular technologies, which can be beneficial for both — the cause of the nation and as well as consumer interest,” Soni stated.
A carbon-based taxation system sets a fixed price on per tonne of carbon or carbon dioxide emitted to incentivise lower carbon emissions.
When asked about the policies which the government should come up with to encourage the luxury car segment that has seen volumes dip over the last two years, Soni pointed towards long term consistency in policy matters.
“There is only one request. We are more concerned about the consistency and longevity of any policy direction that the government frames. If that can be defined in a way that there is a roadmap extended to the industry, it would be helpful for the companies,” he noted.
If any manufacturer decides to invest in technology, plant or machinery, it involves fixed investment upfront considering a certain lifespan, Soni noted.
“If during this lifespan, any policy direction makes this lifespan either curtailed or shortened then the investment tends to go waste,” he added.
He further said: “So, for that, we have been requesting from the government that there has to be consistency, longevity and visibility in policy direction. If that is available, the industry would be more than happy to provide better technologies.”
Elaborating on the growth potential of the luxury car segment in the country, Soni noted that the market would grow if GDP grows consistently for a considerable period.
“If we have to grow this luxury car market, we have to have a more distributed wealth structure. What we are seeing here is one per cent of the country is controlling 73 per cent of the wealth, which seems to be a little lopsided because, in most of the countries, this figure hovers around 50 per cent,” he stated.
The luxury car segment in India is just one per cent of the total mass passenger vehicle market and if this one per cent has to grow, more wealth needs to come into the hands of the people whether it is unicorns, whether individuals or companies, Soni said.
“…It is about GDP growth…India is aspiring to become a USD 5 trillion economy by 2025…The government seems to be committed to growth and the current momentum is very buoyant,” he added.
The more people grow, the more this market grows, Soni said.
Lexus has completed five years of full-fledged operations in India and is now looking to chart its next phase of growth in the country.
The Bengaluru-based company is looking to consolidate sales infrastructure and drive in new models, including fully electric cars, in the country.
The Indian luxury car market was peaking at around 40,000 units per annum in 2018. It got halved to around 20,000 units in the next two years due to COVID related disruptions.
This year it is expected to claw back to the 32,000-35,000 unit mark. (PTI)
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