Nearly 5.1 million new light-duty vehicles (LDVs) were sold in Japan in 2019, with an average fuel consumption that is among the lowest of all major LDV markets at 5.5 litres of gasoline equivalent per 100 kilometres. In 2019, the average fuel consumption of new LDVs in Japan was 24% below the global average, and between 2005 and 2019, fuel consumption of new LDVs fell by 2.4% on average each year. This represents a substantial improvement compared with other major LDV markets, though the pace of fuel economy improvements in Japan slightly slowed between 2017 and 2019.
This deceleration may be a signal that further improvements are becoming increasingly challenging. The fact that fuel consumption of small and large SUVs/pick-ups has increased on average by 3.2% and 6.4% per year between 2017 and 2019, may also be contributing to slowing improvements. Nevertheless, the sales share for SUVs in Japan was 13% in 2019, compared to a global average of 44%. City cars continue to hold the largest share of the LDV market in Japan, accounting for 48% in 2019. As a result, the average weight of LDVs in Japan in 2019 was 1 005 kg, 32% lower than the global average.
Japan has the highest sales share of hybrid powertrains of all major LDV markets, growing to 18% in 2019. In particular, the share of hybrid vehicles is distinctly high in the medium car segment. On the other hand, electric and plug-in powertrains accounted for just 0.5% and 0.3% of LDV sales in 2019.
Since 1999, the Top Runner Program has set targets for corporate average fuel economy standards. In short, the programme calculates standards based on the top-performing vehicle within a given vehicle weight category, vehicle type and drivetrain class. The target for the 2015 fiscal year specified a 23.5% improvement in fuel economy from 2004 (or a 1.9% annual average reduction). The 2020 improvement ratio was 20% relative to 2015, requiring a 3.7% annual average reduction. The 2020 target also took hybrid electric vehicles into consideration as a top runner given their significant share in new vehicle sales. The 2030 standards have two major differences from previous standards, including expanding the scope of powertrains covered and considering well-to-tank fuel efficiency.
Japan has promoted very small, lightweight vehicles (Kei-cars) since 1949 through reduced acquisition and insurance taxes, discounts on rural highway tolls and exemptions from parking space requirements, and fuel consumption labelling has been mandatory in Japan since 2000. Japan also offers up to 800 000 yen in subsidies for individual and company purchases of electric vehicles.