Japanese Kei Car Battling Against High Taxes And Falling Sales

The much-loved Japanese kei car is facing an uphill battle on the back of high taxes for the compact cars.

Short for Kei Jidoasha (light cars), keis have been a staple in Japan’s thriving automotive sector ever since World War II but their popularity is diminishing on the back of government taxes on petrol and sales.

The National reports that a kei-car tax of 50 per cent was introduced in 2014 when the industry reached its annual peak of 2.27 million units. In 2016, sales plummeted to 1.72 million.

Despite the government’s efforts to promote more fuel-efficient vehicles, millions of Japanese remain devoted to kei cars, as do many of the nation’s leading automakers. In fact, many still believe the kei car will continue to play an important part in Japan’s car industry.

“They won't disappear from the landscape,” said Nissan’s domestic vehicle market vice president Asako Hoshino.

According to Hoshino, kei cars could actually thrive in the years to come thanks to recent downsizing trends in Japan.

“Twenty years ago, cars were a symbol of success, but that is not necessarily the case today. The trend now is to reduce the size,” he said.

Current restrictions on kei cars force them to use motors smaller than 660 cc and to be less than 1.48 meters wide. They may look strange but on average, they’re $6,000 USD cheaper than a conventional car.

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