New car sales fall by one-third in Japan in November

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Indy Lifestyle Online

New vehicle sales in Japan fell by nearly one-third in November, suffering the biggest year-on-year fall in 20 months as subsidies for green cars ended, an industry group said Wednesday.

Sales of new vehicles fell for the third straight month to 203,246 units in November, down 30.7 percent from a year earlier, according to the Japanese Automobile Dealers Association.

It was the biggest fall since March 2009. The total number includes cars, trucks and buses but excludes minicars with 660cc engines or less.

"Sales fell in response to the end (in early September) of subsidies for environment-friendly cars," an association official said.

"There is no doubt that demand had risen in advance" of the subsidy's expiration, he said, adding it was difficult to predict when sales would pick up.

The Japanese government ended in early September a popular subsidy to encourage motorists to buy eco-friendly cars, a measure that had boosted demand in the wake of the crippling effects of the financial crisis.

The end of the scheme has dealt a blow to Japanese automakers, which are struggling to cope with the yen's strength against other major currencies, forcing them to scale back production.

A strong yen erodes exporters' incomes when repatriated while making their products more expensive and less competitive abroad.

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