Microcar sale is expected to grow at a compound annual growth rate (CAGR) of 0.1% to reach 1.75 million units in 2018 from 1.73 million in 2010, according to a new report by Frost & Sullivan.
According to the report, Strategic Analysis of the Microcars Market in Japan, Electric Kei Cars likely to be growing segment in the country with increase awareness towards environment protection.
Frost & Sullivan research manager of Automotive & Transportation Practice, Asia Pacific Vijayendra R Rao said leading Kei Car OEMs such as Suzuki, Daihatsu and Mitsubishi are developing and testing electric Kei Cars for the future.
"With the increased awareness and orientation towards environment protection along with the positive response to the Mitsubishi i-MiEV Electric Kei Car, electric microcars are projected to be a growing product segment," Rao added.
The report however claimed that the market has reached maturity level in the country as nearly one-third of all the new cars sold in Japan are Kei Cars.
"More than 50 per cent of the cars on Japan's roads are Kei Cars," Rao added.
The market is going to get a boost as the Japanese government is offering incentives, exemptions, and preferential taxation to promote the usage of electric vehicles.
Japanese government is also building up charging infrastructure across the country with target of setting up 2 million ordinary charging stations and 5,000 rapid-charging stations along the expressway, in service area and in commercial facilities by 2020.
"The EV industry, academicians and the Japanese government are working closely together on enhancing battery performance while reducing cost. This will bring down the high cost of electric Kei cars, thus fuelling growth in the market," Rao said.
