Posts Tagged ‘eco cars’

Electric cars aren’t just for driving any more

Tuesday, March 13th, 2012

Nissan charged up about giving back to the community.

Late last month, Nissan announced that starting in April its new electric car, the Leaf, would be used as an emergency power supply for a new office-condominium high-rise in Shinjuku managed by Sumitomo Real Estate. In the event of a disaster that resulted in a power failure, Leaf cars could be connected to the building’s electrical system through outlets specially installed for recharging electric vehicles and then the cars’ stored power could be used to supply electricity to the building for up to 42 hours for emergency services such as recharging cell phones and illumination. As a side note, the building also has a special hall that can be converted into a shelter for people in Tokyo who cannot return home during a disaster.

Though this is just a corollary benefit of the Leaf, Nissan’s announcement stresses the idea that electric vehicles could offer a wider range of purposes than just mobility. A number of new housing communities that are being developed with “smart grid” technologies have homes with EV charging stations. As with the Sumitomo building, these stations not only provide electricity for charging the battery of an EV, they also accept electricity from an EV that can be used in the home.

Such news is being stressed as more carmakers enter the EV field. Mercedes Benz Japan said it will start selling its own electric car, Smart, as early as August due to consumer demand. It will be the first foreign EV sold in Japan. At the moment the price hasn’t been determined, but an executive with the company has said it will be competitive with domestic EVs. The Leaf’s sticker price is about ¥4 million, but with the restart of the government’s eco car subsidy, a consumer could take it home for about ¥3 million. The Mitsubishi EV, the MiEV, is even cheaper. After subtracting the subsidy it would cost a little less than ¥2 million.

In related news, Panasonic has said it will start selling a rechargeable storage battery system (chikuden) for the home starting next week. The battery specifically takes advantage of home solar systems, and is mainly being promoted as a stopgap measure for power outages. The problem with solar systems is that they only work when the sun is shining and without a storage device any excess power goes to waste if it isn’t fed back into the grid. This battery can store solar power for the night, for a rainy day, or for blackouts. The battery is a lithium ion type, measuring 45 cm by 15.6 cm by 60 cm. Its capacity is 4.65kW per hour. When fully charged it can supply a house of average size with normal power for two days. The main drawback is the cost, which is ¥2,110,500. It’s cheaper to buy a MiEV.

Car taxes could be cut next year

Wednesday, November 2nd, 2011

Old or new, buy later and save!

When you buy an automobile in Japan you pay a bunch of taxes. And when you own an automobile in Japan, you pay a bunch even more taxes on a yearly or biannual basis. Since car sales are considered an engine of the economy second only to home purchases in terms of consumer spending, the government wants more people to buy cars and is thinking about slashing these related taxes.

A tax study group is now discussing the abolition of the jidosha shutokuzei (car purchase tax), which currently amounts to 5 percent of the price paid for a regular automobile and 3 percent for a “mini” (kei) car whose engine displacement is 660 cc or less. This tax is levied on all car sales, new or used, of over ¥500,000 and goes to local governments. Since it’s estimated that car purchase tax revenues for fiscal 2011 will amount to ¥200 billion, it’s quite a sacrifice, but the auto industry has taken a pounding since the March 11 disaster and taxes constitute a fairly large portion of the outlay for a car purchase.

However, there’s more. The Ministry of Economy, Trade and Industry, as well as the various related industry associations, are pushing for eliminating or reducing other auto-related taxes, in particular the annual automobile tax, which is ¥39,000 for passenger cars and ¥7,200 for kei cars. Then there’s the juryozei (weight tax), which is levied at the time of purchase and then every time the automobile is brought in for its mandatory vehicle inspection (shaken) and brings in about ¥700 billion for the central government. That’s ¥37,000 for a vehicle of less than one ton, ¥56,000 for vehicles between 1 and 1.5 tons, etc. Then there’s also a special tax just for kei cars, and, of course, don’t forget that consumption taxes apply to all purchases of cars and parts, not to mention gasoline taxes.

Local governments will probably have something to say about the reduction of all these taxes since they are the main beneficiary. The provisional tax reduction for automobiles designated as being environmentally friendly (eco cars) is scheduled to end on April 30 of next year, and the study group is thinking of eliminating or at least greatly reducing both the car purchase tax and the weight taxes for eco cars in order to promote their sale. In any event, if and when the reductions are approved, they won’t go into effect until fiscal 2012.

Will K-cars save the domestic automotive industry?

Monday, September 26th, 2011

Mira, Mira in the lot...

Two weeks ago, on the same day that it didn’t cover the huge anti-nuclear power demonstration in Tokyo, NHK’s 7 o’clock news bulletin had a feature about Daihatsu’s new small car, the Mira e:s (pronounced “ease”). Initially, we saw the report as further proof of the public broadcaster’s retreat from its traditional aversion to anything smacking of commercial promotion; but in the days since then we’ve come to realize that the announcement was newsworthy as more than just a financial story.

The e:s is the latest model in the Mira K-car series. K-car, as in kei (light), are automobiles made specifically for the Japanese market. The name refers to the engine displacement, which is only 660 cubic centimeters. Consequently, the weight and size are smaller than standard automobiles, which is why many people believe them to be unsafe. Because K-cars are very small and have to be lightweight, they tend to crumple easily in accidents. But they are also low-priced and get high gasoline mileage. What makes the e:s noteworthy is its even lower price–¥795,000–and even higher gas mileage–30 kilometers per liter based on JCO8 mode testing methodology. That’s almost a 40 percent improvement in mileage over previous Mira models owing to e:s’s lighter body structure and smoother transmission function. As a result, Daihatsu is marketing it as the “third eco car” after the all-electric vehicle and the hybrid. For comparison, Toyota’s best-selling Prius hybrid gets 32. 6 km/l and Honda’s Fit hybrid 26km/l.

Daihatsu hopes to sell 10,000 e:s per month, which seems quite feasible since Daihatsu is already the number one maker of K-cars in Japan (but not K-trucks). The company unloaded 341,000 during the first eight months of the year, though one of the main reasons for the robust sales was the March 11 disaster. K-cars are particularly popular in rural areas, where automobiles are a necessity and many families own more than two. Because people use them every day and for every sort of task, economy is the main consideration. Not only do they use less fuel, but the excise/weight taxes and insurance are much cheaper (though they are subject to a special Light Motor Vehicle Tax), maintenance costs are lower and owners in rural areas usually aren’t required to offer proof of a parking space for K-cars at the time of registration. According to the Japan Mini Vehicles Association, 43 percent of the automobiles registered in the Tohoku region before the March 11 disaster were K-cars. In the prefectures that align along the Japan Sea, the portion of K-cars often tops 50 percent, and in Okinawa it’s 53 percent. Many automobiles were destroyed in the earthquake and tsunami, and the demand for used cars, used K-cars in particular, soared as a result. A friend of ours who lives in Osaka just sold her 10-year-old K-car to a broker for ¥50,000. Usually with a car that old the owner has to pay the broker to haul it away.

In fact, K-cars have kept Japan’s domestic automotive industry stable in the past year. After the end of the government’s eco point system, sales of regular cars dropped, but K-car sales have been steady all along. And since they use less parts they were less adversely affected by the supply shortage caused by the March 11 disaster. Even Toyota is coming out with a K-car. Japan’s number one automaker never entered the field mainly because it has a 51 percent controlling interest in Daihatsu. But the market is too good to pass up right now, and the future holds at least some promise. Women are more likely to buy K-cars, and unlike the current demographic of over-70 women, who don’t drive at all, boomer women all drive and will likely continue to do so well into old age. The sunnier outlook for Daihatsu is exemplified by the company’s ad campaign for e:s, which features Bruce Willis making fun of himself as a celebrity shill. Only a company with supreme confidence would dare draw attention to how they draw attention.

Car makers try to stave off the inevitable

Thursday, September 9th, 2010

Don't miss Audi!

Don’t miss Audi!

Though the tax cut (genzei) for automobile acquisition and weight will continue to be in effect for so-called “eco cars” until at least the spring of 2012, on Sept. 30 the eco car rebate (hojokin) officially ends after having been extended once. The government had allocated more than ¥580 billion for the rebate program, ostensibly to promote the sale of fuel-efficient vehicles, though everybody understands it had more to do with helping car manufacturers and stimulating the economy.

And it worked. More than 4.5 million vehicles were sold under the rebate program. Sales were particularly good during the last month as the program wound down. Applications for rebates from new car buyers on Sept. 6 accounted for ¥11.6 billion in subsidies, the highest one-day amount since the program started more than a year ago. The reason is that people knew the program was about to end and wanted to get in on the deal before it did. The rebate amounts for applications on Sept. 7 could have been even higher except that there was only ¥10.2 billion left in the government rebate fund.

What this means is that some new car buyers, expecting to get in on the rebate, missed it. During the summer the government told car makers and dealerships to notify potential buyers that once the rebate money ran out the program would end, regardless of the original Sept. 30 cutoff date. Also, since the procedure for receiving the rebates requires paperwork, buyers had to take this lead time into consideration.

Consequently, car makers are now offering their own discounts to people who tried to get in on the rebate but failed. Fuji Juko, which makes Subaru cars, is offering up to ¥100,000 off any of its designated eco cars if the sales contract is signed between Sept. 6 and Sept. 23. Nissan is offering the same discount amount to purchasers of eight models as long as the sale is finalized within the month of September. Toyota hasn’t offered any discount but says it may offer rebates of its own to dealerships in October, depending on sales, which are expected to drop steeply now that the rebate program has finished. Studies of similar programs carried out in Germany and Korea found that sales dropped by 20 percent once government subsidies dried up.

What one needs to understand is that Japanese taxpayers were basically subsidizing Japanese auto makers’ recovery from the recession. But they were (and still are, with the tax cut) subsidizing foreign auto makers, too, and Audi, for one, isn’t ready to let go. Audi dealerships are offering a “bold bargain” for several of its fuel efficient models. If a buyer signs a contract before the end of Sept. and misses out on the government rebate, Audi will knock ¥100,000 off the price. This is on top of an even larger discount for the current “Eco Support” campaign, which ends Sept. 30, offering ¥200,000 off the price of four of its models. It sounds like a lot, but Audi can afford it thanks to the high yen.

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