77.9% of Cars Sold in May in Japan Qualified for “EcoCar” Tax Break

Posted by Stephen On Thursday, June 30th, 2011

I have previously mentioned how Prius Alpha customers may well not get their cars until after the EcoCar tax break comes to an end on March 31, 2012, but looking at these figures for May 2011 new car sales, you have to wonder whether the whole industry will miss it a little too much to allow the government to not renew it.

After all, 77.9% of vehicles sold in May were eligible for some kind of reduction in their tax charges. 16,195 cars were exempt from paying these car taxes at all, 104,969 cars received a 75% discount on their car tax bill, and for another 48,401 cars the discount was 50%.

Drilling down the figures a little more, and you find that just 35 models drove the sales of the 16,195 cars that were exempt from tax, whereas for the cars with a 75% discount in car tax the equivalent number of models was 1,325.

What is revealing about this is that there is obviously strong demand for models that meet the most stringent fuel efficiency and environmental criteria, but the manufacturers are lagging far behind in supplying consumers models that can reach those targets.

Despite the lack of choice, and only an additional 25% tax saving, a largeĀ  group of consumers are demanding these models, which indicates there is a good opportunity here for companies like Nissan or Mitsubishi (with their EV plans) and Toyota or Honda (with their hybrids). This hyper-efficient vehicle sector looks set for strong growth.

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