Japan’s new vehicle market shrank by 2.4% year-on-year to 428,214 units in September 2025, down from 438,733 units in the same month last year, according to registration data released by the Japan Automobile Manufacturers Association.

The rebound from last year’s production stoppages at Daihatsu Motor, when the company was ordered to halt production of a number of key models following a widely reported safety test rigging scandal, has gone into reverse in the last few months. 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 nine months of 2025, Japan’s vehicle market expanded by 5% to 3,465,406 units, after declining by almost 9% to 3,299,869 in the same period last year, with sales of passenger cars rising by 5.2% to 2,922,497 units and truck sales rising by 3.8% to 535,156 units, while sales of medium and large buses and coaches declined by 1.5% to 7,753 units.

Brands affected by last year’s stoppages, namely Daihatsu, Toyota, and Mazda, have outperformed this year. Toyota’s domestic sales rose by over 6% to 1,061,806 units year-to-date, while Daihatsu’s sales rebounded by 59% to 390,737 units from depressed year-earlier levels, and Mazda’s volumes also recovered by 13% to 117,460 units. Brands not affected by last year’s production stoppages have not performed as well, including Suzuki, which saw its sales rise by 1.4% to 556,014 units, while Honda’s sales declined by over 7% to 477,134 units, and Nissan’s sales were down by 14% to 319,009 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.