Making and selling cars is big business in Japan, which is why 2011's tsunami and earthquake hit the country's retail sales so much over the following months. But thanks to a special subsidy for energy efficient cars, car sales were up 24% in January, in turn pushing up overall retail sales by 1.9%.
The 100,000 yen (£768) subsidies had been made available in the past, but the recent re-introduction has made a particularly dramatic difference to Japan's car makers and retailers. In total, the Japanese government has set aside 300bn yen in order to boost energy efficient car take-up.
Suffering the commercial equivalent of a car breakdown following the tsunami and earthquake, the Japanese automotive industry initially struggled to normalise its output and supply lines. While things are essentially back on track now, the overall economic outlook has compounded the situation, with consumers less willing to part with their hard-earned cash. The subsidy technique, however, appears to have turned things around rather quickly.
According to Takuji Okubo of Societe Generale in Tokyo, "The Japanese automotive association predicts that domestic car sales in 2012 will reach 5 million, up 19% year-on-year due to subsidy and normalization of the supply chain disruption."
One has to admire a country and an industry that can bounce back so quickly from a devastating tsunami and earthquake, in a time frame of little under a year.
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