Japan Automakers Increase Sales from Subsidies on Eco-Cars

March 18, 2012

Unlocking Word Meanings
Read the following words/expressions found in today’s article.

1. subsidy (n.) – financial help given to a person or organization
Example: The research group was able to continue the studies on new medicines because of the government subsidy.
2. recovery (n.) – the process of returning back to normal or better condition
Example:  Doctors expect the continuous recovery of the patient after the operation.

3. render (v.) – to cause something to be in a certain situation
Example: Excellent ideas render one to be an important member of the company.

4. domestic (adj.) – within one’s own country
ExampleDomestic problems concerns the government more than foreign ones.

5. expire (v.) – to come to an end; to become no longer acceptable
Example: He has to leave the company when his contract expires after six months.

Read the text below.

Japan’s automobile industry is improving its sales this year with the help of a government subsidy program for eco-friendly cars.

Each subsidy totals up to 100,000 yen or $1,245 per eco-friendly vehicle. As a result of the program, passenger vehicles sales last February increased by 33% compared to sales for the same month in 2011, while sales for 660cc mini vehicles rose as well by 25%.

The program gives big assistance to Japanese carmakers, who are still on recovery from last year’s losses. Factories in Japan were damaged due to March 11’s quake-tsunami disaster, while floods in Thailand later that same year also greatly affected car parts production.

In addition, the high value of the yen has rendered Japanese cars too expensive for foreign buyers, making it difficult to boost sales. Between April and October last year, the yen increased by 11% against the US dollar.

According to experts, carmakers now want to keep their regular production schedules, but may end up producing too much supply if low international sales continue. With the subsidy scheme, there is an increase in domestic demand that can somehow prevent carmakers from further losses.

However, the subsidy program is limited to only 300 billion yen. Once the amount is reached, the program will expire, and experts say car sales may decrease again. In the meantime, Japanese consumers are taking advantage of the program before it ends.

Viewpoint Discussion
Enjoy a discussion with your tutor. 

Discussion A

·         Should the government help private companies that are not doing well? Please explain your answer.
·         When do you think is there a need for the government to provide subsidies?

Discussion B

·         Is it important for people to buy products made in their own country?
·         How can the government encourage its citizens to buy local products?


March 18, 2012