Govt encourages green car technology to meet international standards

Hybrid and other low-emission automotives will account for 50 percent of local new car sales by 2020, targets the trade ministry. This decision will promote development of green-car technology and enhance Japanese automakers international competitiveness. However, the government is still to announce financial benefits to customers to help achieve the target.

Earlier, Liberal Democratic Party-led government set a similar goal of having such vehicles account for one out of every two new passenger cars sold by 2020. Economy, Trade and Industry Ministry went a step further by announcing the details for achieving the goal, such as raising the efficiency of lithium ion batteries: a key power source for hybrid and electric vehicles; and improving infrastructure, such as power chargers.

The government will encourage experimenting next-generation vehicles in a model city with a modern smart grid system, linking power suppliers with family units, and use the report to enhance the export of unconventional green technology and city planning designs.

The government will also assure that Japanese standards are internationally accepted, for which they will support producers of technologies such as batteries and power chargers.Sales of hybrid vehicles were stimulating while the domestic new vehicle sales saw a 9.3 percent down from 2008 and marking continuous fifth year decline. The trade ministry plans to develop and promote environmental technologies for vehicles; an area in which Japanese automakers are building their expertise. This strategy will further improve their international competitiveness.

The domestic automakers are increasing production of next-generation vehicles to meet up the ministry's new target. In January, Toyota Motor Corp. in a joint venture with Panasonic Corp, started production of batteries for hybrid vehicles. Toyota plans to raise its global sales of hybrid vehicles to at least 1 million units very soon, from 530,000 units in 2009.

Carlos Ghosn, president and chief executive officer of Nissan Motor Co., is of the view that electric vehicles will account for 10 percent of global automobile demand in 2020.This financial year, Mitsubishi Motors Corp. plans to produce 9,000 units of i-MiEV : an electric vehicle launched last year and increase it to at least 30,000 units in 2012.

However, the industry feels that the government's target for next-generation vehicles is unrealistic. According to a ministry projection, If private-sector efforts to increase production of next-generation vehicles are not supported by government, these vehicles will only account for less than 20 percent of new car sales in 2020.

The automaker official feels that support from the state through tax breaks and subsidies will be required to achieve the goal, while the ministry announcements did not confirm the support to potential car buyers. The Government may find it difficult to balance as it vows new assistance measures aimed at promoting sales of next-generation cars, while Government subsidies on purchase of eco cars will be abolished by the end of September.

Cheap gasoline-run vehicles are expected to dominate markets in developing countries meanwhile, due to which, automakers are indecisive about the time when they should shift their production from gasoline-powered vehicles to next-generation cars.