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“The Japanese auto industry is expected to pick up later this year thanks to government incentives, which are boosting sales of environmentally friendly cars, notably hybrids,” said Okasan Securities auto analyst Yasuaki Iwamoto.

And that sale’s boost helped Honda post a profit yesterday as many other automakers reported huge losses. As a result, Honda is picking up its hybrid pace to take advantage of the momentum of interest in hybrid cars, but is such a move the right move?

Eventually, government incentives for the purchase of hybrids will end in Japan. What happens then? Will consumers still continue to purchase hybrids? Will other markets, such as North America, pick up the slack?