Japan’s new vehicle market shrank by over 8% year-on-year to 301,221 units in August 2025, down from 328,471 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 reported safety test rigging scandal, has gone into reserves in the last two months. 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 rates last year.

In the first eight months of 2025, Japan’s vehicle market expanded by 6.1% to 3,037,194 units after declining by 10% to 2,861,136 in the same period last year, with sales of passenger cars rising by 6.4% to 2,565,036 units and truck sales were up by 4.8% to 465,255 units, while sales of medium and large buses and coaches declined by 1.3% to 6,903 units.

Toyota’s domestic sales rose by 8% to 941,416 units year-to-date, while Daihatsu’s sales rebounded by 71% to 341,709 units from depressed year-earlier levels, and Mazda’s volumes also recovered by 15% to 103,825 units. Brands not affected by last year’s production stoppages have not performed as well so far this year, including Suzuki which saw just a slight sales increase to 486,461 units, while Honda’s sales declined by almost 8% to 413,376 units, and Nissan’s sales were down by 13% to 280,477 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.