Raw Japan

Slices of Japanese business, politics and life

Mercedes? No thanks, I’ll take a hybrid

June 11, 2009

VOLKSWAGEN-LAW/“I hope the next three months will be better for you than the last three,” Czech ambassador Jaromir Novotny told a gathering of Japanese car importers last month.

The way things are going, he’ll be hoping against hope.

In April, Japan introduced an “eco-car” tax incentive that has left all foreign car brands such as Volkswagen, Mercedes-Benz and BMW, neatly outside the fence of eligibility.

It’s the last thing they need in a market that’s already full of quirks that make life difficult for non-Japanese car brands: the existence of a huge and unique 660cc microcar segment, convoluted recycling laws and stringent regulations against what type of materials can be used in fuel tanks, to name just a few.

No one is complaining about incentivising low-emission cars. But what rankles outsiders is that the perks are based on an outdated fuel economy testing method that critics say is a poor reflection of real-life driving.

“It’s so far from reality that we never bothered to tune our cars to get good readings under this method,” an executive at a European carmaker told me. “And now they’ve hit us with this eco-car tax and even if we wanted to make the adjustments, it would take us until next year to be ready.”


Japan’s mileage test is based on cars with engines already warmed up, a very slow acceleration and a top speed of just 70 kph (43 mph) –  slow even for Japan, where the speed limit on highways is 100 kph.

The differences mean Toyota’s third-generation Prius gets listed fuel economy of 38 km/litre, or 89 mpg, in Japan, but only 50 mpg in the United States.

Granted, that still beats anything in its class hands down, but there’s another catch: fuel economy and emissions standards in Japan are divided into nine different weight classes, and designed in such a way that a relatively big car with a smallish engine scores well in each category.

Unfortunately for European cars, that’s pretty much the reverse of their general strategy for Japan: “a big, sexy engine in a small car relative to its weight”, as one industry expert described it to me.

To be fair, it wouldn’t be the first time that a country formulated its regulations to suit domestic companies.

But there must be questions when a Volkswagen Golf, known the world over as a fuel-efficient car, doesn’t qualify for the green tax rates when a big, honking van like Toyota’s Alphard does.

Photo credits: REUTERS/Christian Charisius; REUTERS/Lucas Jackson


We do have a name for these measures, its called protectionism.


Very well put Nikkey 225

Posted by Sebastian | Report as abusive

To Mercedes, more green means less prestigous. Of course they wouldn’t sacrifice prestige for environment, at least not until green technology has sound foundation.

Posted by steele | Report as abusive

Hybrids are only half-green, and their tax incentives should also be halved.

Posted by mona | Report as abusive

Even carrying same model name, some countries wilfully export more-polluting models to foreign users and sell less-polluting models domestically. Maybe it is called environmental protectionism too.

Posted by Yamayoko | Report as abusive

Western high-end brands want to tell the world that they don’t have to go so much green or mindful of economy to attract same many customers. Your brand not.

Posted by Jebb | Report as abusive

We all should be proud of brazilian iniciatives to reduce CO2 levels by stimulating biofuel-powered cars.

Posted by Marcus Vinicius Pinto Schtruk | Report as abusive

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