Japan's new vehicle market plunged by close to 29% to 270,393 units in April 2020 from 378,687 units a year earlier, according to registration data released by the Japan Automobile Manufacturers Association (JAMA).

While the market had already been in decline since the government hiked the general sales tax rate from 8% to 10% last October, the drop in April shows the full impact of the COVID-19 coronavirus on vehicle sales.

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

All major automakers in Japan have made significant production cuts in the last two months, including Toyota, Nissan, Honda, Mazda, Suzuki, Subaru, Daihatsu and Mitsubishi.

Economists believe there is worse to come for the economy in the second quarter after the Japanese government imposed a state of emergency in many areas early in April, including restrictions on consumer and business activity.

Tokyo and Osaka were by far the cities worst hit by the virus.

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Export demand has also continued to plunge in the second quarter of the year.

Domestic vehicle sales in the first four months of the year declined by 13.9% to 1,642,119 units compared with 1,906,902 units a year earlier.

Passenger car sales fell by just over 14% to 1,367,686 units, while truck sales were down by 13.1% at 269,550 units and bus sales declined by 10.7% to 4,883 units. 

Toyota was the best performing major brand in the market in the first four months of the year with sales falling by just 7.7% to 501,489 units while second-placed Honda reported a 16% decline to 232,119 units, Suzuki 219,346 units (-18.6%), Daihatsu 210,02 (-13.4%), Nissan 174,129 units (-21.1%) and Mazda 71,848 units (-5.4%).