Japanese incentives boost sales of green cars, TVs

TOKYO – Japanese are snatching up hybrid cars, solar panels and energy-efficient TVs, wooed by government incentives designed to battle a recession while conserving energy.

Tax breaks and rebates on green cars have helped two hybrid vehicles, Toyota’s Prius and Honda Motor Co.’s Insight, become the best-selling models in Japan in the last two months. Likewise, consumers are buying up ecological electronics products to earn “eco-points” that the government has promised can be later converted into products or other deals that have yet to be announced.

The renewed consumption is giving Japan’s struggling corporations and sagging economy a much-needed jolt – although some economists wonder if the demand created by the incentives will run out of steam.

Car dealership owner Hiromi Inoue can barely contain his glee over the thousands of Prius orders coming into his Toyota showrooms in Tokyo, now making up more than half their sales.

“What we’re seeing is extraordinary,” he said.

Japan’s automakers could use some help: vehicle sales here dropped to their lowest level in three decades last year, and Toyota Motor Corp. sank into its worst annual loss since its 1937 founding.

Under a new government program, hybrids are now tax-free, delivering savings of about 150,000 yen ($1,500) for a Prius buyer. Other fuel-efficient models qualify for lower savings.

Also helping is a “cash-for-clunkers” program similar to the plan initiated by President Barack Obama, which offers vouchers worth up to $4,500 for a gas-guzzler turned in for a new car in the U.S.

In Japan, people who trade in a car 13 years or older get a 250,000 yen ($2,500) rebate for buying an ecological model. Those without a trade-in get 100,000 yen ($1,000).

Koji Endo, auto analyst with Credit Suisse, expects the green incentives will lift annual Japanese vehicle sales by 100,000 vehicles or more.