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>But industry and government officials are increasingly worried that these microvehicles have become a distraction for the nation’s automakers — still bastions

>But industry and government officials are increasingly worried that these microvehicles have become a distraction for the nation’s automakers — still bastions of the Japanese economy — and are moving to wean drivers off them. In April the government took what its critics charged was a hard-line route. Kei drivers were hit with a triple whammy of a higher sales tax, higher gasoline tax and higher kei car tax, the last of which the government raised by 50 percent, sharply narrowing their tax difference with regular-size vehicles. I feel like there's more going on than the article is saying. "industry and government officials are increasingly worried that these microvehicles have become a distraction for the nation’s automakers" sounds like lobbyists for full-size cars feeding politicians what to say. I don't buy that a bunch of politicians decided it was the for the greater good of the country to increase taxes on a cheap, fuel efficient vehicle.

ekianjo 12y ago
> I don't buy that a bunch of politicians decided it was the for the greater good of the country to increase taxes on a cheap, fuel efficient vehicle. You are right, politicians in Japan are mostly influenced by industry lobbies. They went to devaluated the Yen not too long ago just so that Toyota and a few other major manufacturers could sell more products overseas. And now everything is more expensive in Japan (petrol price increased so all manufacturing goods and anything that needs to be moved around has increased significantly in price).
- po 12y ago
  …just so that Toyota and a few other major manufacturers could sell more products overseas The strong yen was hurting any and all export industries in Japan, not just a few companies. The ability to export at competitive prices is extremely important to the Japanese economy. A devalued yen does drive up the price of imported goods (like fuel) but it also drives demand for jobs. The price of locally produced goods are largely unaffected.
  - ekianjo 12y ago
    Do you go shopping? Because i have seen most of my bills go up. Including food. And not just a little. EDIT: I have been in companies making products in Japan for years and I can tell you the petrol price impacts everything and a weak yen is very detrimental to your product cost structure. If you dont see the prices move much its because the companies are taking the hit as they do not want to raise prices too much and therefore keep prices more or less the same but reduce quantities, or remove ingredients or parts of the products to make it cheaper to produce. But do not kid yourself into believing increased petrol prices because of a weaker yen have no effect on the economy or prices. They clearly do.You basically get less for your money as a consumer.
    - po 12y ago
      Yeah, I readily admit rising fuel costs drive up the prices of most consumable goods. It's likely that the closing of nuclear plans was a significant contributor to that as well. My point was that given the situation, it is better to have prices rise across the board due to fuel costs than to have whole industries and major employers collapse due to lack of export competitiveness. If the price rise was due to fuel costs, then it will even drive efficiency gains. I don't think you can fairly cast it as favoritism to industry lobbies on behalf of a few major companies. I think at the time, all of Japan was at risk of losing competitiveness and once you lose an industry, it's quite hard to get it back.
      - ekianjo 12y ago
        > My point was that given the situation, it is better to have prices rise across the board due to fuel costs than to have whole industries and major employers collapse due to lack of export competitiveness. If the price rise was due to fuel costs, then it will even drive efficiency gains. There's tons of companies in Japan who only deal with the Japanese market and do not export anything outside. Because they can survive and proper on the Japanese market size. So effectively for these companies the rising fuel costs are making things harder from them every single day. Major employers only employ a small amount of people in Japan, everything considered, and therefore it's clearly the work of powerful industrial lobbies which fail to see that rising fuel costs are going to kick them back in the ass in the next coming year and bring things back to normal again. With the depreciation of the Yen they just achieved some gains for a few quarters but in the end it will even out no matter what. Japan has lost competitiveness a long time ago and even when the yen was weak back in 2006-2007, so the yen getting stronger was actually quite positive for the Japanese consumer as a whole: prices were stable and even decreasing for several commodities post 2008-crash. What you see here is just Abe doing his magic trick, trying to look like Harry Potter while he's just a clown from a local fair who understands nothing of Economics. Hey, that's why they invented the word Abenomics, because it does make any sense for anyone else.
muyuu 12y ago
I tend to believe the government's version, just because all big Japanese automakers have strong kei sales. Extra tax won't help them. It may help the government collect a bit extra but that's that. What I didn't quite get from the article is how do taxes compare. Looks like they simply got a more similar treatment to standard cars. These cars would be much cheaper to maintain even with the same tax regime as regular cars. IMO all sales tax should be regular tax, and road tax/car taxes should just go away. They tax fuel enough to cover for all that and it makes sense to tax on usage.
- alandarev 12y ago
  > IMO all sales tax should be regular tax, and road tax/car taxes should just go away. They tax fuel enough to cover for all that and it makes sense to tax on usage. Government giving up on any tax opportunity? I wish, but not in the world I know... > What I didn't quite get from the article is how do taxes compare. Looks like they simply got a more similar treatment to standard cars. They seem to be removing the 50 years lasting subsidy, which makes sense to be honest - at some point it has to finish. > These cars would be much cheaper to maintain even with the same tax regime as regular cars. Exactly my thoughts, if these cars are so popular, efficient, and budget saving - they shall do OK without getting government involved.
  - Jtsummers 12y ago
    > Government giving up on any tax opportunity? I wish, but not in the world I know... Interestingly, the state of Georgia dropped the normal annual ad valorem tax on cars. Now, any new car purchase is covered by its sales tax (which was being paid before) for the life of the vehicle for that owner (when they sell it the new owner will owe some smaller amount, I assume, but haven't had to deal with yet). I still haven't figured out how they expect to make up that revenue, unless other taxes are just bringing in enough revenue to make up for it. Or it may have been expected/hoped that the reduced cost of ownership would encourage the purchase of newer cars.
- heydenberk 12y ago
  Gasoline and automobile infrastructure are a historically massive, ongoing expense, and cars have enormous externalities. I doubt any government in the world taxes cars highly enough relative to other goods.

ekianjo 12y ago

> I don't buy that a bunch of politicians decided it was the for the greater good of the country to increase taxes on a cheap, fuel efficient vehicle. You are right, politicians in Japan are mostly influenced by industry lobbies. They went to devaluated the Yen not too long ago just so that Toyota and a few other major manufacturers could sell more products overseas. And now everything is more expensive in Japan (petrol price increased so all manufacturing goods and anything that needs to be moved around has increased significantly in price).

po 12y ago
…just so that Toyota and a few other major manufacturers could sell more products overseas The strong yen was hurting any and all export industries in Japan, not just a few companies. The ability to export at competitive prices is extremely important to the Japanese economy. A devalued yen does drive up the price of imported goods (like fuel) but it also drives demand for jobs. The price of locally produced goods are largely unaffected.
- ekianjo 12y ago
  Do you go shopping? Because i have seen most of my bills go up. Including food. And not just a little. EDIT: I have been in companies making products in Japan for years and I can tell you the petrol price impacts everything and a weak yen is very detrimental to your product cost structure. If you dont see the prices move much its because the companies are taking the hit as they do not want to raise prices too much and therefore keep prices more or less the same but reduce quantities, or remove ingredients or parts of the products to make it cheaper to produce. But do not kid yourself into believing increased petrol prices because of a weaker yen have no effect on the economy or prices. They clearly do.You basically get less for your money as a consumer.
  - po 12y ago
    Yeah, I readily admit rising fuel costs drive up the prices of most consumable goods. It's likely that the closing of nuclear plans was a significant contributor to that as well. My point was that given the situation, it is better to have prices rise across the board due to fuel costs than to have whole industries and major employers collapse due to lack of export competitiveness. If the price rise was due to fuel costs, then it will even drive efficiency gains. I don't think you can fairly cast it as favoritism to industry lobbies on behalf of a few major companies. I think at the time, all of Japan was at risk of losing competitiveness and once you lose an industry, it's quite hard to get it back.
    - ekianjo 12y ago
      > My point was that given the situation, it is better to have prices rise across the board due to fuel costs than to have whole industries and major employers collapse due to lack of export competitiveness. If the price rise was due to fuel costs, then it will even drive efficiency gains. There's tons of companies in Japan who only deal with the Japanese market and do not export anything outside. Because they can survive and proper on the Japanese market size. So effectively for these companies the rising fuel costs are making things harder from them every single day. Major employers only employ a small amount of people in Japan, everything considered, and therefore it's clearly the work of powerful industrial lobbies which fail to see that rising fuel costs are going to kick them back in the ass in the next coming year and bring things back to normal again. With the depreciation of the Yen they just achieved some gains for a few quarters but in the end it will even out no matter what. Japan has lost competitiveness a long time ago and even when the yen was weak back in 2006-2007, so the yen getting stronger was actually quite positive for the Japanese consumer as a whole: prices were stable and even decreasing for several commodities post 2008-crash. What you see here is just Abe doing his magic trick, trying to look like Harry Potter while he's just a clown from a local fair who understands nothing of Economics. Hey, that's why they invented the word Abenomics, because it does make any sense for anyone else.

muyuu 12y ago

I tend to believe the government's version, just because all big Japanese automakers have strong kei sales. Extra tax won't help them. It may help the government collect a bit extra but that's that. What I didn't quite get from the article is how do taxes compare. Looks like they simply got a more similar treatment to standard cars. These cars would be much cheaper to maintain even with the same tax regime as regular cars. IMO all sales tax should be regular tax, and road tax/car taxes should just go away. They tax fuel enough to cover for all that and it makes sense to tax on usage.

alandarev 12y ago
> IMO all sales tax should be regular tax, and road tax/car taxes should just go away. They tax fuel enough to cover for all that and it makes sense to tax on usage. Government giving up on any tax opportunity? I wish, but not in the world I know... > What I didn't quite get from the article is how do taxes compare. Looks like they simply got a more similar treatment to standard cars. They seem to be removing the 50 years lasting subsidy, which makes sense to be honest - at some point it has to finish. > These cars would be much cheaper to maintain even with the same tax regime as regular cars. Exactly my thoughts, if these cars are so popular, efficient, and budget saving - they shall do OK without getting government involved.
- Jtsummers 12y ago
  > Government giving up on any tax opportunity? I wish, but not in the world I know... Interestingly, the state of Georgia dropped the normal annual ad valorem tax on cars. Now, any new car purchase is covered by its sales tax (which was being paid before) for the life of the vehicle for that owner (when they sell it the new owner will owe some smaller amount, I assume, but haven't had to deal with yet). I still haven't figured out how they expect to make up that revenue, unless other taxes are just bringing in enough revenue to make up for it. Or it may have been expected/hoped that the reduced cost of ownership would encourage the purchase of newer cars.
heydenberk 12y ago
Gasoline and automobile infrastructure are a historically massive, ongoing expense, and cars have enormous externalities. I doubt any government in the world taxes cars highly enough relative to other goods.