By on August 21, 2010

The Japanese auto industry is staring at the calendar like a rabbit at the snake. October 1, the rabbit will be dinner. October 1,  government subsidies for purchases of “environmentally friendly vehicles” (read pretty much any new vehicle that passes Japanese rules) will be no more. According to popular wisdom, come October, the Japanese new car market that had enjoyed double digits growth rates, will go poof and implode.

So what to do in a country where with the exception of flu masks, the Top 10 list of popular products ”was dominated by low-priced retail merchandise and eco-friendly products as consumers pinched pennies and took advantage of government stimulus subsidies” as Reuters put it? Simple: Local subsidies.

Anjo, a city in the Japanese Aichi Prefecture, where many parts suppliers have their plants, wants to soften then blow and will offer their own subsidies after the government well runs dry.

You must be a registered resident or a company with an office in the city to be eligible. The car must be bought from a dealer in the city. The program is basically the same as that of the  central government: $1166 for a regular car,  $583 for a minivehicle. One car per resident, five per company.

The city hopes that the plan will set an example for other communities. And it seems it does, Toyota City and Okazaki City also plan to extend the programs after the expiration of the state’s subsidies, The Nikkei [sub] says.

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6 Comments on “Japan: Cities Will Pay You To Buy A Car...”

  • avatar
    Educator(of teachers)Dan

    Their tax dollars at work. I could have supported cash for clunkers if it had some real teeth about getting poluters off the road, or vehicles in poor poluting condition.

    • 0 avatar
      Cammy Corrigan

      @Educator(of teachers)Dan

      Cash for clunkers didn’t work on any level apart from trying to stimulate sales that weren’t really there.

      Basically, the governments around the world took money (which they probably borrowed) to encourage people to destroy cars which were already working, in order to put themselves in debt for a new car which they didn’t really need (because they already had a car which worked). Outside of vanity or safety, why would you buy a new car, when you already have one that works?

      As for taking polluters off the roads, that argument was dealt with by TTAC. Here’s the article.

    • 0 avatar
      Educator(of teachers)Dan

      Cammy, I’ve read the article, I’ve been on TTAC a long time. I simply meant if the vouchers only applied to folks who had old beaters that wouldn’t pass inspection because of tailpipe emissions or something similar, and that they could prove they were driving on a regular basis. I know it didn’t work on any level as an environmental program. I only brought up C4C because the article mentions how the Japanese are buying so many environmentally friendly, govt-subsidized products.

    • 0 avatar
      Cammy Corrigan

      Sorry, I’ve doing research on economies of the world and boondoggles like this really infuriate me as that money could have been better spent. Or better still, not spent at all and accept that the car market needs a massive correction.

    • 0 avatar

      I found the American C4C program infuriating for similar reasons. It was nothing but a gift of public money solely to people who could prove that they didn’t need it.

      If you accept as an axiom that the government should spend money to stimulate the economy and new cars sales, the money could have been much more effectively spent buying up a huge fleet of econoboxs and giving them to people too POOR to afford a new or newish car. Then let them go out and use their new mobility to get better jobs and improve their lives and spending power.

  • avatar

    Ha! I betcha this penny pinching approach for their consumers is probably because of the long lasting psychological effect of their on going decade of economic depression. Of course all of this is just a theory.

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