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Japan announced today an extension of tax breaks in their country aimed at continuing to encourage auto makers to produce more fuel efficient vehicles. This extension is expected to give the Japanese economy a boost that it badly needs and put more people back to work in a nation that has been weakened by natural disasters and prolonged weaknesses in the global economy. The extension is expected to expire by 2015 instead of 2012. Japan is also expected to resume its one year rebates for eco-friendly vehicles as well too even though these rebates expired last September. Debated Down To the Minute The Japanese Government and the Democrat party in Japan debated the tax breaks and incentives for their auto industry for hours before coming to an agreement on mutual goals for the auto industry and its future. Jun Azumi, the Japanese finance minister encouraged the nation to continue supporting the automotive industry as the government continues to seek ways to stop losses and get companies like Toyota back on a sound financial track. As the world continues to struggle with global economic meltdown, Japan holds the largest debt of any country and their economic future is tied to the success of the automotive industry. Christopher Richter, an analyst for the CLSA said “failure to provide support to the auto industry in Japan is critical for the nation’s future and the world economy’s future as a whole.” The Tax Burden Must Be Reduced Yoshihiko Noda, Prime Minister of Japan rejected the continued levies on new vehicles while at the same time urging politicians to focus on lowering the tax burden. In spite of the positive auto news in Japan, Toyota released a new forecast for the coming year ending on March 31st showing that it expects its profits to be 54% less than expected. This news left their Deputy Governor; Kiyohiko Nishimura dismayed saying that a continued slowdown in their economic growth is almost “unavoidable” now. In spite of the negative economic news in Japan, many automotive industry experts remain optimistic that the automotive industry will turn around in their country and other parts of the world thanks to the demand for hybrid vehicles in the United States and other countries that are enforcing stricter smog emission laws.
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