Japan’s new vehicle market shrank by 1.8% year-on-year to 395,189 units in October 2025, down from 402,310 units in the same month last year, according to registration data released by the Japan Automobile Manufacturers Association.

This was the fourth consecutive month of decline for the market, after rebounding in the first half of the year from last year’s production stoppages at Daihatsu Motor. Japanese consumers have also come under increased pressure from higher vehicle loan repayment rates after the Bank of Japan raised interest rates last year.

In the first ten months of 2025, Japan’s vehicle market expanded by 4% to 3,860,597 units, after declining by almost 8% to 3,702,179 in the same period last year, with sales of passenger cars rising by 4.4% to 3,250,845 units and truck sales up by 3.8% to 601,307 units, while sales of medium and large buses and coaches declined by 2.7% to 8,445 units.

Brands affected by last year’s stoppages, namely Daihatsu, Toyota, and Mazda, have outperformed this year. Toyota’s domestic sales rose by almost 5% to 1,191,295 units year-to-date, while Daihatsu’s sales rebounded by 54% to 450,734 units from depressed year-earlier levels, and Mazda’s volumes increased by 8% to 128,217 units. Brands not affected by last year’s production stoppages have not performed as well this year, including Suzuki which saw its sales rise by just under 2% to 619,969 units, while Honda’s sales declined by over 7% to 526,094 units, and Nissan’s sales dropped by 15% to 346,712 units.

Overseas brands accounted for just over 5% of total vehicle sales in Japan year-to-date, led by German automakers including Mercedes-Benz, BMW-Mini, Audi, and Volkswagen.