German carmakers are to challenge the domination of hybrids in Japan’s green vehicle market with the introduction of more diesels.

Daimler will launch a diesel version of the Mercedes Benz M-Class SUV in Japan around summer. After that, it will offer at least four more diesel passenger vehicles.

BMW plans to debut diesel engines in its mainstay 3 series and other models by the end of the year. It already sells the diesel X5 SUV in Japan.

Volkswagen has said it may import diesels at some point.

Foreign carmakers’ Japanese market share topped 7% for the first time in the year ended 31 March. German automakers accounted for more than three-quarters of this.

Spurring companies to import diesels to Japan are tax incentives including reduced weight taxes and taxes on purchases of vehicles that meet set energy-efficiency standards. The government has decided to extend the breaks for another three years, beyond the original deadline of the end of this month.