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Automobile industry

Japanese Automakers Urge Government to End Exorbitant Taxes

Strategic Insights

— 1 min read

The presidents of major Japanese automakers, including Toyota, Nissan, and Honda, gathered in Tokyo to plead with the government to end what they call exorbitant taxes on cars. The taxes, which are estimated to be around twice or triple those in Great Britain and Germany, and 49 times those in the U.S., are threatening to hollow out manufacturing and wipe out jobs. The automakers are also battling the strong yen, which eats away at the value of overseas sales, and stagnant sales due to the March tsunami disaster. The executives were joined by representatives from auto unions and dealers, and were accompanied by a petition signed by over 4.3 million people in just two months.

Key Takeaways:

  • The total petition signatures collected by the Japanese automakers amount to over 4.3 million in just two months.
  • The complex system of taxation on cars in Japan is estimated to be around twice or triple those in Great Britain and Germany, and 49 times those in the U.S.
  • Reducing the tax burden would potentially add some 920,000 vehicles to annual auto sales in Japan.
  • Japanese car taxes are so high that over a decade an owner pays more in taxes than the original purchase price.
  • The strong yen has caused the eight major Japanese automakers to lose 80 billion yen ($1 billion) each time the dollar falls by one yen.
  • The March tsunami disaster and stagnant sales have contributed to the industry's crisis.
  • The automakers want to retain manufacturing in Japan to keep technological development going and to protect jobs.
  • Toyota president Akio Toyoda stated that the industry could be destroyed if jobs are lost overseas.

Statistics:

  • Over 4.3 million people signed the petition in just two months.
  • The tax burden on Japanese cars is estimated to be around twice or triple those in Great Britain and Germany.
  • The tax burden on Japanese cars is 49 times that of the U.S.
  • Reducing the tax burden would potentially add 920,000 vehicles to annual auto sales in Japan.
  • The strong yen has caused the eight major Japanese automakers to lose 80 billion yen ($1 billion) each time the dollar falls by one yen.
  • The loss of 80 billion yen ($1 billion) corresponds to a 1 yen fall in the dollar.

Sources:

  • The Associated Press
  • Koji Sasahara, The Associated Press, photo caption
  • Waterloo Region Record 2011

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