If there are no reforms then, he said, they won't exit India but will not scale up either.
Representatives of leading automakers, including Toyota Kirloskar Motor India Pvt.
In a separate statement, the company had earlier said that its priority would be to utilise its existing capacity in India which will take time.
"The government keeps taxes on cars and motorbikes so high that companies find it hard to build scale".
Toyota Kirloskar Motor Vice-Chairman Vikram Kirloskar on Tuesday confirmed that the company will invest over ₹2,000 crore in the next 12 months, refuting a statement by a senior company official that it would stop further expansion in India due to high taxes.
"Toyota Kirloskar Motor would like to state that we continue to be committed to the Indian market and our operations in the country is an integral part of our global strategy". Taxes on Indian vehicles are among the highest in the world. Its local unit is owned 89% by the Japanese company and has a small market share - just 2.6% in August versus nearly 5% a year earlier, Federation of Automobile Dealers Associations data show. "The message we are getting after we have come here and invested, is that we don't want you", Vishwanathan has been quoted as saying.
Later in a statement, Toyota said the auto industry has been requesting the government to support the industry through a viable tax structure.
The tax on a four-metre long SUV with an engine capacity of more than 1500 cc works out to be as high as 50%.
The additional levies are typically imposed on what are considered to be "luxury" goods.
A similar pitch to reduce taxes was made by India's largest auto maker Maruti Suzuki India Ltd recently.
That effectively ended independent operations in a country Ford had once said it wanted to be one of its top three markets by 2020.
"Such punitive taxes discourage foreign investment, erode automakers' margins and make the cost of launching new products prohibitive", Viswanathan said. "@vikramkirloskar has clarified that Toyota will invest more than Rs 2000 crore in next 12 months", read the tweet by the Union Minister, who is in charge of the heavy Industries portfolio. "You would think the auto sector is making drugs or liquor", he added.
The company's recent partnership with Suzuki in India on sharing technology and best practices are also in support of the "Make in India" initiative and Indian government's policy, and aim to enhance the competitiveness of both companies, the company said. The taxes on electric vehicles are now 5%, which the government might raise once sales increase.