The Japanese government has confirmed it will extend popular tax breaks for low-emission and hybrid cars, providing a much needed boost to the country’s stagnant auto market.
A plan approved by the cabinet over the weekend will see tax breaks that were due to expire in April next year extended through to April 2015.
Under the scheme, the greenest cars such as hybrids and electric vehicles do not face any tax, cutting the price of popular green cars such as Toyota’s Prius hybrid or Nissan’s electric leaf by around 150,000 yen ($1,900).
Other low-emission vehicles also face lower levels of tax than higher-emission models.
The move represents a significant boost for leading Japanese auto firms, such as Toyota and Nissan, which have been battling with a weak market and significant supply disruptions caused by the Japanese earthquake.
However, concerns remain that a complementary grant scheme that provides subsidies to people purchasing green cars could yet be allowed to lapse as the government seeks to curb spending.
