TOKYO - The Japan Automobile Manufacturers Association last week called for European-style tax incentives for buyers who turn in older cars as a way to kick-start Japan's moribund car market.
JAMA said a scrappage policy would be beneficial both to the economy, by kick-starting sales, and to the environment, by taking older, less-fuel-efficient cars off the road.
Japanese Prime Minister Ryu-taro Hashimoto has unveiled plans for a $75 billion economic stimulus package that includes about $30 billion in income-tax cuts spread over two years.
Details of the plan have not been finalized, but JAMA hopes its proposal for a scrappage incentive will be incorporated into the final package.
JAMA proposed that buyers be exempted from car-purchase taxes, which can total 7 percent of the price, if they turn in a vehicle 10 years old or older.
Cars of that age comprised 11.4 percent of Japan's fleet as of March 1997, JAMA said.
Similar incentives in France, Italy and Spain triggered major increases in car sales.
JAMA Chairman Yoshifumi Tsuji said it is clear that some sort of sales stimulus is needed. In the first half of April, sales were off about 8 percent from last year, he said.
In April of last year, sales tumbled 15 percent. Sales have fallen every month since then.
Despite the poor start to the month, Tsuji, who is also chairman of Nissan Motor Co., predicted that sales for the month will end up flat.