• Bloomberg

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Toyota Motor Corp. and Honda Motor Co., Japan’s two biggest automakers, led the seventh straight increase in the nation’s monthly auto sales as government incentives boosted demand.

Sales of cars, trucks and buses, excluding minicars, rose 35 percent to 294,887 vehicles in February from a year earlier, the Japan Automobile Dealers Association said in a statement Monday. Toyota sold 146,145 units, excluding Lexus-brand cars, up 48 percent.

Japan’s auto sales began recovering from a yearlong slide in August as government rebates and tax cuts for fuel-efficient vehicles helped rekindle demand. The incentives helped raise sales by about 600,000 vehicles last year and may increase them by about 900,000 this year, the Japan Automobile Manufacturers Association said at the end of December.

“A year ago, auto sales were in very bad shape because of the recession,” said Yoshiaki Kawano, an auto analyst at CSM Worldwide in Tokyo. “The incentive programs hadn’t been implemented, either.”

February sales jumped 36 percent at Honda, while Nissan Motor Co., the nation’s third-largest automaker, sold 18 percent more vehicles.

Toyota said Feb. 10 it will recall 223,068 hybrid cars in Japan to repair computers in antilock brake systems. As delivery and registration of new cars takes a few months after customer orders are placed, any effect from the recall will not be reflected immediately in sales figures, Kawano said.

Under a government program started in June, consumers in Japan can apply for a ¥250,000 subsidy if they scrap a car more than 13 years old to buy a new one, and ¥100,000 for a new car purchased without scrapping an old one. The subsidies are available retroactively for purchases from last April 10.

The government has extended the program, which was initially set to expire at the end of March, for six months until September.

Electric, hybrid, natural gas and some diesel vehicles also qualify for an exemption from the country’s weight and purchase taxes.

Vehicle sales may rise 4.1 percent to 4.8 million units in 2010, according to the Japan Automobile Manufacturers Association.

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