10 Years after the Financial Crisis. Had New Regulations and Government Initiatives for Ecological Cars Changed the Japanese Automobile Industry and Market?

Publication Type:

Conference Paper


Gerpisa colloquium, Paris (2018)


Japanese automobile industry, public policies



Ten years ago the Japanese automobile industry was confronted with the largest crisis in its postwar history. In reaction to the crisis the Japanese government in cooperation with the manufacturers implemented new regulations in order to increase the sales of fuel-efficient cars and started new initiatives to foster the development of ecological friendly or next generation cars. Underlying these policies is an overall strategy to change Japan’s economy and society to a ‘Low Carbon Society’ as the program is called that aims at the reduction of Greenhouse gases in Japan of around 80% by 2050.

Regarding the automobile industry over the last ten years, several programs have been implemented. Starting in 2007 the METI announced its ‘Next Generation Vehicles and Fuel Initiative’, which set a target of 10 million low emission vehicles until 2010. In May 2009 the Ministry for Environment followed with a long-term program called ‘Strategy for the Spread of Next Generation Vehicles’ aiming at 2 million EVs in 2020 and 8.8 million in 2050. In April 2010 finally the METI introduced the ‘Next Generation Vehicle Strategy 2010’, which aims at a share of 15~20% of electro and plug-in hybrid vehicles in new vehicle sales until 2020.

In addition to this longer term strategies, new taxation regulations as well purchasing incentives were introduced that intended to change customers’ car purchasing priorities in the short run.

To increase the effect of theses measures also the test cycle for measuring the fuel consumption of cars was redesigned in order to narrow the gap between the data given for the fuel consumption of a given car based on the test cycle and the real consumption of the car in daily use.

Therefore ten years after the financial crisis, it might seem worthwhile to assess the effect of these public initiatives and policies in Japan.

As the data will show, customers’ purchasing behavior has changed to some extend. However, as in the past, the initiatives and policies so far have neither resulted in a breakthrough of next generation vehicles nor in a significant change of the patterns of car usage or new forms of mobility.

The findings of the paper might therefore also be relevant with respect to whether policies for banning the sales of cars with conventional combustion engines as intended by some countries like Norway or China are feasible in the envisioned timeframe (2040).


Relevance and Links to the GERPISA Program and the 2018 Conference:

The paper has relevance to the overall theme of the GERPISA conference ‘Who drives the change? New and traditional players in the global automotive sector. In particular it relates to the theme (5) Public policies – national and regional clusters: between path dependency/inertia and structural change


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