TOKYO Dec 15 Japan's auto industry body
welcomed the government's plan to extend incentives on the
purchase of greener cars on Thursday but repeated its demand to
abolish two vehicle-specific taxes that it says is hurting
In addition to the universal 5 percent consumption tax on
all goods and services, Japan imposes a vehicle weight tax and
acquisition tax that make car ownership disproportionately
costly in Japan compared with the rest of the world.
The auto industry has been calling for the abolition of
those taxes, stepping up lobbying efforts a few years ago when
the government began to use revenues from those levies for
purposes other than road maintenance, for which they were
The Japan Automobile Manufacturers Association (JAMA) had
been hoping to end the debate this year as the industry reels
from the yen's strength. Japanese automakers are keen to reduce
loss-making car exports but also want to keep a minimum level of
production at home to prevent the hollowing out of the
manufacturing sector -- an important driver of Japan's economy.
To protect domestic production and jobs, automakers have
been seeking Tokyo's help to stimulate dwindling car sales at
home, citing the government's own projection that abolishing the
two taxes could push annual vehicle sales up by 920,000 units.
Instead, Tokyo this month proposed a partial reduction in
the vehicle weight tax, an extension of tax incentives on
purchases of fuel-efficient cars for three years under stricter
standards, and a fresh scheme to subsidise the purchase of clean
vehicles. Details are yet to be decided, and the proposed
changes are subject to approval next year in parliament.
"We're grateful to the government for these steps," JAMA
Chairman Toshiyuki Shiga told a news conference.
"But there's no basis for the acquisition and vehicle weight
taxes anymore, and we will continue to insist that they be
abandoned," he said, noting that the group had collected 4.3
million signatures from consumers in a petition demanding their
JAMA said in September it expects domestic sales this year
of 4.25 million vehicles, down 14 percent from 2010 due to
supply problems after the March 11 disasters. That was before
the Thai floods disrupted output at Toyota Motor Corp,
Honda Motor Co and other carmakers.
Japanese vehicle sales grew 7.5 percent in 2010 to 4,956,136
thanks to tax incentives on fuel-efficient vehicles and
subsidies to replace older cars. The tax incentives were due to
run until next March, while the subsidies expired in early
Shiga, who is also chief operating officer of Nissan Motor
Co, said the industry group would come up with an
updated domestic sales forecast for the fiscal year to March 31
when details of the proposed tax incentives are set.
Japanese vehicle sales peaked at 7.78 million vehicles in