Car market pushed up by “green subsidies” in February

7 years ago by in Business, Featured

Japanese car makers sold more vehicles in February, thanks to government’s subsidies for eco-friendly cars.

Passenger cars rose by 33 percent compared to the same month in 2011, while sales of 660cc mini-vehicles increased by 25 percent.

The authorities reintroduced a subsidy scheme worth of Y300 billion that awards every buyer who chooses an energy-efficient car a bonus of up to Y100,000 ($1,200).

“The cap on the subsidies should get us to September, so people know they have to avail it sooner rather than later,” a Deutsche Bank analyst explained. “In order to maintain production utilization they need more domestic demand to absorb the output,” he added. “This subsidy program helps do that.”

Analysts expect however a correction on the market after September, when the government’s subsidies may expire.

Japanese car makers have been affected by last year’s natural disasters, which disrupted their supply chains, as well as by the strong national currency which cuts into their abroad revenues.