Government subsidies result in surge of car sales in Japan

Japan’s auto market displayed robust signs of recovery with a 92% surge in auto sales for the month of April, compared to the same period a year earlier. Government subsidies helped sustain the strong upward trend and accelerate the industry’s recovery in demand from the lows experienced following last year’s natural disasters. According to the Japan Automobile Dealers Association (JADA), the country’s domestic sales of new cars, trucks and buses rose to 208,977 vehicles, from 108,824 a year earlier in April, surpassing the 78% spike in March; the figures do not include sales of mini cars and trucks. According to JADA, this is the eighth straight month of increase, but even as sales bounced back from the 51% drop experienced a year earlier after the March 2011 earthquake and tsunami, they are still below the pre-quake level of 222,095 units, which was posted on April 2010. But the upbeat domestic sales figures for the first month of the new fiscal year are expected to ignite optimism among Japanese automakers. From December 20 last year until the end of January 2013, the Japanese government has offered a total of JPY300 billion (US$3.8 billion) in subsidies to customers who buy fuel-efficient cars. The incentives are aimed at helping Japanese automakers, who are struggling with the yen’s strength because a strong yen. (May 1, 2012)