Last year, Japan was toying with the idea of introducing a green car subsidy as a way to help boost slumping sales and decided that it was worth a shot. As anticipated, Japan's green car subsidy, which awards 300,000 yen ($2,991 U.S. at the current exchange rate) for each fuel-efficient vehicle purchased, immediately pushed up sales and helped bolster the struggling industry. For the month of July, Japan reports new vehicle sales of 486,606, representing a 12.9 percent increase over June.
Sales of hybrids and subcompacts witnessed the most growth as consumers jumped on the opportunity to save some cash before the subsidy expires in September. Owing to the success of the Prius, Toyota displayed a 19.1 percent increase in sales for July, with Honda following closely behind by reporting a 13.3 percent spike in sales, largely attributed to the success of the Fit. Meanwhile, hot sales of the Demio (Mazda2) subcompact helped Mazda's sales volume leap up 25.3 percent. With the subsidy set to expire soon, Japanese automakers are actively urging customers to get in on the action now before it's too late. Why wouldn't they?