(Source: Green Car Congress, AP, Wall Street Journal & The Japan Times Online)

Toyota’s Prius was the top-seller in Japan in July, with 27,712 units sold—almost quadruple the 7,058 units sold in July 2008, up nearly 25 percent from June, according to data from the Japan Automotive Dealers Association (JADA).

Image Courtesy: Green Car Congress - Monthly Prius Sales in Japan Since Jan 2007

For a second straight month, Prius has bagged the top-seller title, underscoring robust demand for fuel-efficient vehicles.  Demand for gasoline-electric vehicles has surged in Japan, helped by tax breaks and subsidies under a government initiative to promote cleaner automobiles. Toyota has said customers placing orders now for the Prius will have to wait until at least April for delivery due to surging demand.

Toyota Motor Kyushu Inc. said Thursday that orders for the hybrid version of its luxury Lexus sedan have been robust, leading the Toyota unit to expand production of the model.

Orders for the HS250h Lexus hybrid launched July 14 have reached 8,600 units, far more than the monthly target of 500, Seiichi Sudo, president of the Toyota unit, said in Fukuoka.

“Orders are very brisk as customers endorse its environmental performance,” he said.

The company is making employees work 30 to 90 minutes of overtime a day to meet demand, Sudo said, warning, however, that delivery of many ordered cars could be delayed beyond the March 31 expiry for the government’s subsidy program.

Overall auto sales in Japan declined 4.2% to July to 289,927. Toyota sales decreased 3% to 135,535 according to JADA.  This decline in Japan’s auto sales for July was the smallest since the world’s third biggest auto market started shrinking last August.

This was the 12th straight month of decline, but it was much smaller than the 13.5% drop in June.

The results for the April-June quarter showed that Toyota Motor Corp. is getting some traction from aggressive cost-cutting and Japanese government incentives that have boosted sales of green cars like the Prius. Analysts surveyed by Thomson Reuters had forecast a fiscal first quarter loss of 210 billion yen.

Booming sales of the Prius hybrid helped the world’s No. 1 automaker Toyota deliver a smaller-than-expected 77.82 billion yen ($819 million) quarterly loss and narrow its forecast of red ink for the full year.

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(Source:  Wall Street Journal, Green Car Congress & Tree Hugger)

Image Courtesy: Green Car Congress - Prius sales in Japan by month since January 2007. Data: JADA.

Last month (May 2009), the Toyota Prius was the top selling model in the world’s second-largest economy; the rival Honda Insight hybrid came in third, according to new car sales rankings—excluding minicars with displacements of less than 660 cc—released by the Japan Automobile Dealers Association (JADA).   

In April Honda was quite happy to report that its new Insight hybrid was both the best selling car in Japan for that month (outselling the Toyota Prius) and the first hybrid car to have that honor with 10,481 units. (Earlier post.) In May, the Insight dropped to third place with 8,183 units, behind the Prius and the Honda Fit, with 8,859 units.Toyota’s May performance was all the more surprising, since the third-generation Prius didn’t go on sale until May 18.  

The Prius posted 10,915 units in May, in Japan more than twice the 5,079 units sold in May 2008 and compared to 1,952 units in April 2009, according to the JADA data. (In the US, Toyota reported 10,091 units of the Prius sold in May.)

There are several possible explanations—beyond the fact that both Toyota and Honda have cut prices to make hybrids a little less niche and a little more mass market. First, generous government incentives: Japan’s stimulus package included a range of tax breaks for buyers of hybrid (and electric) vehicles which can knock thousands of dollars off the price tag. Japan has tougher mileage standards—but that affects what kind of cars manufacturers turn out, not what kind of cars consumers flock to. One huge difference is the price of gasoline—which automatically makes the hybrids more attractive, especially in a recession. Japan, like many European countries, slaps a hefty national tax on gas. Right now, Japanese pump prices work out to $4.61 a gallon. That compares to a U.S. national average of about $2.50 a gallon.

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