Japan’s new vehicle market shrank by 3.6% year-on-year to 390,516 units in July 2025, down from 405,175 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, when Daihatsu Motor was ordered to halt production of a number of key models following its widely covered safety test rigging scandal, appears to have fizzled out. Other brands were also affected by the stoppages last year, including Toyota and Mazda. Japanese consumers have also come under pressure in recent months from higher vehicle loan repayment rates, after the Bank of Japan increased its interest rate last year.

In the first seven months of 2025, Japan’s vehicle market expanded by 8% to 2,735,977 units after declining by 11% to 2,532,665 in the same period last year, with sales of passenger cars rising by 8% to 2,315,711 units, while truck sales increased by 7% to 414,004 units, and sales of medium and large bus and coach sales were up by just 1% to 6,262 units.

Toyota’s domestic sales rose by 11% to 851,340 units year-to-date, while Daihatsu’s sales rebounded by 88% to 305,822 units from depressed year-earlier levels, and Mazda’s volumes also recovered by 17% to 93,897 units. Brands not affected by last year’s production stoppages have not performed as well so far this year, including Suzuki which saw its sales rise just slightly to 437,314 units, while Honda’s sales declined by over 7% to 372,155 units, and Nissan’s sales were down by almost 12% to 255,126 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.