Japan Car Sales Boosted in March Due to Green Subsidies image

Government subsidies for energy efficient cars helped new vehicle sales surge 78% in Japan in March.

Auto sales totaled 497,959 units in March, up from 279,389 units last year, but the surge was mostly due to the sharp 37 % drop in sales after a massive earthquake and tsunami struck on March 11th, 2011, devastating much of coastal northeastern Japan and the massive flooding in Thailand later in the year.

To help support the industry, the government announced late in 2011 it was extending tax breaks for low-polluting vehicles, which were due to end this month, and also pledged to provide subsidies of up to 100,000 yen ($1,200) for purchases of fuel-efficient cars between Dec. 20th , 2011 and Jan. 31st, 2013. The subsidies are meant to offset export a drop in export production due to the high value of the yen.

March’s surge follows a 32% increase in February and a 41% increase in January. Sales for January through March rose 3% compared to the same period last year to reach 3.1 million vehicles. Toyota was the automaker with the highest March sales increase of 104%, Nissan Motor following with 77.6% and Honda with 55.2%.