Japanese carmakers counting on incentives for domestic growth image

The auto industry in Japan is hoping the governments’ incentives for eco-friendly cars will boost sales by about 900,000 vehicles in 2012.

According to Toshiyuki Shiga, the head of the Japan Automobile Manufacturers Association (JAMA), growth in the Japanese auto industry is depending on incentives, as exports are not likely to grow consistently because of the strong yen and overseas economic slowdown.

“We hope the incentives will become a booster similar to the previous ones. Demand in the domestic market will become more important next year because it is hard to forecast that exports will show significant growth,” Toshiyuki Shiga was quoted as saying by The Japan Times.

The incentive program is worth 300 billion yen and is aimed at boosting domestic sales of electric vehicles, hybrids and other environmentally friendly cars. The Japanese government also decided earlier this month to extend a tax break for green cars for three years, previously scheduled to expire in April 2012.

The Japanese auto industry has been hit hard by the record rise of the yen and supply problems following the earthquake and tsunami in March, as well as the floods in Thailand in November. The previous incentive program introduced in 2009 and the tax break helped increased sales by 900,000 units.