Japan's new vehicle market continued to decline sharply in June 2020, by almost 23% to 347,371 units from 450,398 units a year earlier, according to registration data released by the Japan Automobile Manufacturers Association.

That followed a 45% year on year drop in May as domestic consumers retrenched amid rising uncertainty due to the global COVID-19 pandemic.

The vehicle market was already in decline in the fourth quarter of 2019, way before COVID-19 had begun spread globally, after the government hiked the general sales tax rate from 8% to 10% last October.

Government data confirmed Japan slipped into recession in the first quarter of 2020 with GDP shrinking by 3.4% year on year in this period due to plunging domestic consumption and exports.

Economic activity in the country was estimated to have dropped by over 6% in the second quarter. 

All major automakers in Japan made significant production cuts in the second quarter in response to plunging global demand and measures introduced by the Japanese government to help prevent the local spread of the disease.

Vehicle sales in the first six months of the year declined by 19.8% to 2,207,775 units compared with 2,753,420 units a year earlier.

Passenger car sales fell by 20.1% to 1,825,981 units, while truck sales were down by 18.3% at 375,949 units and bus sales declined by 20.6% to 5,845 units. 

Toyota was one of the best performing major brands in the market in the first half of the year, with sales falling by just 14.3% to 685,090 units, while Honda reported a 22.3% decline to 313,213 units; Suzuki 293,427 units (-22.4%); Daihatsu 272,131 (-21.1%); Nissan 236,965 units (-24.2%); and Mazda 89,348 units (-13.1%).

Sales of imported vehicles fell by almost 32% to 21,330 units in June and by over 23% to 114,630 units in the first half of the year.