Fuel-efficient cars eligible for government tax breaks made up more than half of new domestic car sales in June, the chairman of the Japan Automobile Manufacturers Association said on Thursday.

”The impact from tax breaks is steadily beginning to appear,” Satoshi AOKI, also chairman of Honda Motor, told Kyodo News in Tokyo. ”We hope to make best use of the tax breaks and subsidies to revitalise the market.”

According to JAMA, eco-friendly cars accounted for 194,000 units, or 55%, of new car sales in June, including passenger vehicles and minicars, up from 114,000 units, or 43%, in April.

Sales of hybrids and other energy-saving cars have been increasing in recent months on the back of green tax breaks and subsidies introduced by the Japanese government in April and June.

On overseas auto markets, Aoki welcomed strong sales in China and signs of a recovery in European sales thanks to scrap incentives and other government stimulus measures.

But he added that the US market remains weak despite the rapid exit from bankruptcy of General Motors and Chrysler LLC.

”I hope the new GM and the US auto industry will get back on their feet so that the US economy will recover and spread its positive impact across the world,” Aoki said.