Aug 10, 2016

    Drive to roll out new cars in Japan ahead of tax hike


    JAPANESE carmakers will release new models beginning this summer, having concluded that there would be a rush

    to buy before a consumption tax hike

    that is planned for April next year.

    On July 26, Fuji Heavy Industries unveiled

    a new version of its flagship Impreza for release

    in autumn.

    The new model features a U-shaped air bag that is deployed from the front to protect pedestrians.

    Nissan will release a new version of the Serena minivan this month that emphasizes automated driving technology.

    The model automatically maintains distance between vehicles, allowing the driver to stay

    in the same lane comfortably even in traffic jams.

    In autumn, Toyota will release a plug-in hybrid model, the Prius PHV, that travels more than

    twice the distance than the previous model

    when powered only by electricity.

    Mazda's Axela, which was released in July,

    is equipped with new technology to stabilise cornering by automatically adjusting engine output.

    Domestic new car sales have declined for the second consecutive year since the consumption

    tax was increased to 8 per cent in fiscal 2014.

    Sales have also been hurt by the stagnant economy.

    Automakers usually spend about four years developing a new model and then decide on the

    timing of release after analysing market trends.

    The industry deemed the planned tax hike in April next year as its first good business chance for a while and was eager to use it to boost business.

    Some observers believe the tax hike delay

    will not hurt sales while others are concerned

    about the move.

    "The delay may spur clients to put off buying

    a new car," said an executive of a leading

    car company.

    The cost of keeping a large inventory of

    new cars will balloon if they are not sold, and

    that may affect the development of new models.

    Intense advertising battles are expected

    to take place from now on.