Japan's green-car subsidy comes to a halt; sales of subcompacts dip 12.2%

Japan's green-car subsidy, which awarded 300,000 yen ($3,598 U.S. at the current exchange rate) for each fuel-efficient vehicle purchased, has come to a halt. The program drove hybrids and subcompacts off dealer lots at rates far higher than what they were in the pre-subsidy period. Japanese automakers, including Toyota, Honda and Mazda benefited from the subsidy, recording double-digit increases in sales. With the subsidy no longer around, sales have tipped the other way.

The green-car subsidy vanished September 7th and, by the end of the month, the Japan Automobile Dealers Association (JADA) reported the nation's first drop in new car sales in more than a year. Subcompact cars were hit hard, with sales dropping 12.2 percent from the numbers reported in August. The slumping sales have caused concern amongst automakers and dealerships are now struggling to stay afloat. The Nikkei reports that an employee at a Toyota dealership in Nagoya, Japan summed up the severity of downfall with these three words, "it was horrible." Kinda makes you wonder what will happen to sales of alternative-technology vehicles when America's incentive programs vanish into thin air, doesn't it?

[Source: Green Car Congress]