Toyota Motor Corp., will cut daily output by 16 percent in October, as the Japanese government will end subsidies for fuel-efficient vehicles, the Nikkei reported.
Japan’s domestic sales of new vehicles jumped 40.9 percent from a year earlier in June for the 10th consecutive monthly increase, data released by an industry body showed.
Resumption of government subsidies for fuel-efficient cars from late December has also helped push sales and local production.
The JPY 300 billion (USD 3.8 billion) subsidy programs provide an allowance of up to about JPY 100,000 (USD 1,200) for eco-friendly vehicles.
“There will certainly be an impact” when the government runs out of the JPY 300 billion it has allocated to subsidize the purchase of fuel-efficient cars, possibly this month, Toyota chief Akio Toyoda said.
“While we are grateful for the subsidy program – we want the government to seriously consider fundamental reform of taxes on automobiles,” referring to the nine levies imposed on motor vehicles.
However, the Japanese automaker will meet its annual domestic production target of 3.4 million units, helped by better-than-expected output in the first half of the year, the Nikkei said.