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Mr. Vijayendra R Rao, Research Manager, Automotive & Transportation Practice, Asia Pacific at Frost & Sullivan said that 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," he added.

New analysis from Frost & Sullivan (http://www.automotive.frost.com) Strategic Analysis of the Microcars Market in Japan finds that the microcars market in Japan is expected to grow marginally at a compound annual growth rate (CAGR) of 0.1 per cent to 1.75 million units in 2018 from 1.73 million in 2010 for the 2010-2018 period.

Mr. Rao also said that the Kei Car market in Japan has reached the maturity stage of the development graph 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," he added.

He also said that the Japanese Government is offering incentives, exemptions, and preferential taxation to promote the usage of electric vehicles. The Government is also setting up charging infrastructure across the country and encouraging new uses of electric cars such as rental cars, car sharing, and taxis.

The Government is also promoting electric vehicles in eight EV/Plug-in hybrid vehicle towns from eight prefectures. It also has set a target of building 2 million ordinary charging stations and 5,000 rapid-charging stations along the expressway, in service area and in commercial facilities by 2020.

Mr. Rao said that Japanese researchers have also developed fast charging technology that allows electric vehicles to recharge within minutes and operate over long distance.

"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," he added.

Mr. Rao also noted that the key role played by 89 i-MiEV electric Kei cars in the relief and rehabilitation efforts during the March 2011 tsunami and earthquake in Japan has created positive consumer sentiment towards electric vehicles in Japan.