New vehicle sales in Japan fell by over 5% to 389,529 units in November 2024 from 411,089 units a year earlier, according to registration data released by the Japan Automobile Manufacturers Association.

The domestic market slowed again last month after stabilising in the previous two months, following production stoppages at Toyota Motor Corporation earlier in the year in the wake of the safety-test rigging scandal at its Daihatsu subsidiary. Economic growth in the country slowed to 0.9% year-on-year in the third quarter from 2.2% in the second quarter, reflecting declining capital expenditure and slower export growth. Private consumption growth accelerated to 0.9% from 0.7%, driven by temporary income tax cuts as part of a government stimulus package.

The government, under newly elected Prime Minister Ishiba Shigeru, is expected to introduce new policies aimed at driving up consumer spending. These will likely include efforts to increase wage growth and household incomes, revitalize regional economies, reskill the country’s workforce, and encourage corporate investment.

In the first eleven months of 2024, the vehicle market declined by over 7%, to 4,091,708 units, after growing by 14% to 4,416,247 units in the same period last year. Sales of passenger cars fell by 7% to 3,444,750 units, while truck sales dropped by over 11% to 637,593 units. Sales of medium and large buses and coaches continued to grow strongly during this period, increasing by 25% to 9,365 units.

Toyota’s sales fell by 14% to 1,259,357 units year-to-date, while Daihatsu’s sales plunged by 40% to 333,594 units, and Mazda’s sales were down by 22%, at 131,224 units. Automakers not affected by the Toyota group scandals fared much better, including Suzuki, which saw an 11% increase to 669,215 units; Honda with 622,589 units (+15%); and Nissan with 444,073 units (-1%).

Overseas brands account for around 5% of total vehicle sales in Japan, led by German automakers including Mercedes-Benz, BMW-Mini, Audi, and Volkswagen. China’s leading electric vehicle (EV) manufacturer BYD Auto strengthened its Japanese lineup earlier this year, as it looks to establish a stronger presence in the country’s emerging zero-emissions vehicle segment.