‘Green’ tax boost for Japan domestic sales

JAPAN: ‘Green’ tax boost for domestic sales

Author: Tony Lewis | 20 December 2011

Tax incentives to encourage motorists to buy cleaner cars could increase annual sales by 900,000 units, Toshiyuki Shiga, head of the Japan Automobile Manufacturers’ Association (JAMA) has said.

This increase will help offset falling exports caused in part by the continuing strength of the yen, he added.

The tax incentives were set to expire at the end of the current fiscal year. They were extended by three years while scrappage subsidies worth JPY300bn (US$3.85bn) were reinstated after they ran out last September.

The previous steps together had helped boost domestic sales by about 900,000 vehicles over a one-year period, said Shiga.

"We are hoping for a similar boost when both the incentives and subsidies are available in the 2012 fiscal year," he told reporters.

Japanese vehicle sales grew 7.5% in 2010 to 4.96m units thanks to the government's incentives. The forecast for this year is 4.25m, a decrease of 14% blamed largely on the effects of the earthquake and tsunami in March.

Sectors: Environment, Vehicle markets