Japanese Green Vehicle Subsidy Aims to Help Boost Car Sales

Despite the infamous earthquake and tsunami having occurred almost a year ago, the effects are still being felt among Japanese automakers in the home islands.

Supplier issues and a rising yen have made the going tough in many cases, rendering Japanese manufacturers less competitive in price terms against foreign rivals. Not helping matters is the fact that domestically, consumer confidence has continued to put a damper on auto sales, which has a negative effect, since domestic output isn’t able to absorb the required production utilization necessary to keep prices competitive.

In an effort to help address the situation, the Japanese government has reintroduced a subsidy that enables buyers who purchase environmentally friendly vehicles to receive a discount of up to 100,000 yen ($1,227).

The scheme, introduced last month, is capped at some 300 billion yen ($3.6 billion), in order to help buyers take advantage of it sooner rather than later (Deutsche Bank’s Kurt Sanger said it will probably last until the end of the summer).

In the short term, that should at least help stimulate auto sales. In fact, there are already reports of consumers flocking to showrooms looking to buy new vehicles.

How it will effect pricing and availability of built in Japan green vehicles like the Nissan Leaf and Toyota Aqua/Prius, not only at home but in other key export markets like the U.S., will certainly be interesting to see.

Sanger, in an interview with the BBC, said in regards to JDM auto sales “we expect very strong growth until September, followed by a correction.”

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  • MrEnergyCzar

    I wonder if there is as much green subsidy resistance in Japan as there is in the states?


  • VoltOwner

    I’d like to know if this applies to cars imported to Japan, or if it only applies to domestically produced cars.

  • Blonda

    Very interesting idea! I wonder if these will apply to other countries too!
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