Toyota Sees Its Domestic Sales Down 20% in 2013 image

Toyota expects sales in Japan to drop by a fifth in 2013, mainly due to the end of government tax incentives for fuel-efficient vehicles.

The government tax incentives ended in mid-September and since then Toyota’s domestic new vehicle sales have continuously dropped. Sales Japanese market account for 30% of the automaker’s total sales. Toyota has reduced its 2013 target for domestic sales from 1.67 million, the target for this year, to 1.36 million vehicles.

In November Toyota reduced its group-wide sales forecast for this year to 9.66 million vehicles from 9.76 million vehicles, due to declines in China sales, caused by the territorial dispute between Japan and China. This week the automaker reported sales in the world’s biggest auto market have fallen 22% compared with the same period last year, from a drop of 44% in October and almost 50% in September.

Last month, Toyota Motor CEO Akio Toyoda said that he hoped that Japan’s next government would be able to fix the relations with China, as all Japanese automakers have seen their sales drop due to the increasing tensions between the two nations, which sparkled after Japan purchased a group of disputed islands located in the East China Sea.