Japan Says Sayonara To Subsidies, Should Slump Sharply
After 13 months of rising car sales, Japan is looking into a deep, dark abyss. A government subsidy program will end any minute. Officially, the program runs through the end of September, but the funds have dried up. As of Monday, around 10.2 billion yen ($122m) were in the kitty. That’s about a day’s worth of subsidies.
According to The Nikkei [sub], Parliamentary Secretary for Economy, Trade and Industry Yosuke Kondo told a Diet committee this morning that the program will end ”around today or tomorrow because there has been about 10 billion yen worth of applications per day from this week.”
Today, the Japanese government still accepted applications, but it is unsure whether the latecomers will get their money. The Japanese market is expected to take a steep nosedive. “Domestic sales for the October-December quarter may fall by about 30 percent,” says Honda Executive Vice President Koichi Kondo.
The Toyota Prius is positioned to become the prime victim of the departing subsidies. Says The Nikkei [sub]: “Toyota Motor Corp.’s Prius hybrid car has benefited substantially, partly because the automaker redesigned the model around the same time that the subsidy program began. The Prius was the top-selling model in Japan for 15 straight months through August.”
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Japan is to Economics as Road Runner is to Physics.