Domestic sales in Japan are expected to recover in 2012

Article by Christian A., on December 21, 2011

Domestic sales in Japan are expected to recover in 2012, according to Japan-based automakers. Next year, the government will be introducing subsidies while it extends tax breaks as well. Toshiyuki Shiga, chairman of the Japan Automobile Manufacturers Association, said that in 2012, the demand for cars, trucks, and buses in Japan could increase by around 900,000 units after having had a record 14% decline drop this year.

Shiga added that auto sales are expected to increase at the same pace as in 2009 when the government initiated tax cuts and subsidies. The output of Japanese automakers was significantly affected by the March 11 earthquake in Japan and the flooding in Thailand. This prompted Toyota Motor Corp. to reduce its profit forecast by over 50%. The auto group has yet to give its forecast of the total sales for 2012.

It estimates that this year, the demand at its home market will fall to 4.25 million units from 4.95 million units in 2010. The trade ministry said that Japan's government will allot 300 billion yen ($3.8 billion) for the car incentives – a part of its fourth post- earthquake budget.

If the supplementary budget is approved, these subsidies will apply to environmentally friendly cars registered from the launch of the program. Shiga, also known as the chief operating officer at Nissan Motor Co, said that a 7-8% increase this year is expected from the industrywide vehicle sales in China. [source: BusinessWeek]

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