Toyota earns only 40k per Fortuner SUV, the govt gets 18 lakh: Here's how

Toyota Fortuner is priced between 31.79 - 48.43 lakh (ex-showroom, Delhi).
By : HT Auto Desk
| Updated on: 16 May 2022, 09:20 AM
Toyota Fortuner sales result in the dealers getting around ₹1 lakh per unit sold.
Toyota Fortuner sales result in the dealers getting around ₹1 lakh per unit sold.
Toyota Fortuner sales result in the dealers getting around ₹1 lakh per unit sold.
Toyota Fortuner sales result in the dealers getting around ₹1 lakh per unit sold.

Toyota Fortuner is one of the bestselling SUVs in India with a premium touch. Available between 31.79 - 48.43 lakh (ex-showroom, Delhi), the Toyota Fortuner is claimed to fetch the automaker up to only 40,000 per SUV sold, while the dealers get around 1 lakh. The government on the other hand gets a whopping 18 lakh approximately for each Toyota Fortuner SUV sold in the country, claims an explainer video on Youtube.

(Also read: Toyota to produce electric vehicle components in India: Details)

As the video explains, the proceedings of car production to the sale are divided into three different levels - manufacturer, dealer and the government. The video also explains how among these three stakeholders, the manufacturer earns the least by selling the car and the government takes the largest chunk. A dealership, which plays an integral role by connecting the manufacturer with the consumer earns a commission of around 2.5-5 per cent on each car's sticker price.

The majority of the proceeds go to governments at both state and central levels through a wide range of tax components. For example, a vehicle is taxed with two different components under the GST ambit. The tax incidence includes GST at 28 per cent and GST compensation cess at 22 per cent. For the Toyota Fortuner, the amount is more than 5 lakh and 7 lakh respectively. The on-road price of a car includes components such as registration, road tax, green cess for the diesel models and fast tag. All this money goes to the government coffer.

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The manufacturer's margin, dealer's commission and government tax on vehicles depend on the vehicle's sticker price and its segment as we. Due to this, the luxury car sales result in more margin for OEMs and more commission for dealers, while the tax incidence on the luxury vehicles too is significantly higher.

First Published Date: 16 May 2022, 09:20 AM IST
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