Japan’s domestic new vehicle market expanded by 2.75% year-on-year to 332,997 units in May 2026, following a 10% rise to 324,069 units a year earlier, according to registration data released by the Japan Automobile Manufacturers Association. Sales of passenger vehicles rose by 2.75% to 276,910 units, while truck sales increased by 2.2% to 55,168 units.
Japan’s vehicle market has in the last two months been supported by the discontinuation of the prefectural Environmental Performance Tax at the end of March. Overall new vehicle demand in the country remains sluggish, however, reflecting slow economic growth in the country amid weak consumer sentiment, following interest rate hikes by the central bank and other rising cost-of-living pressures. The latest GDP data showed that growth slowed to 0.6% year-on-year in the first quarter of 2026.
In the first five months of the year, vehicle sales increased slightly to 1,960,306 units after rising by over 11% to 1,952,299 a year earlier, with passenger vehicle sales falling by 1.5% to 1,635,664 units, while truck sales rose by over 11% to 319,665 units, led by a 19% surge in light truck sales to 96,936 units. Sales of medium and large buses and coaches increased slightly to 4,977 units following strong growth in previous years.
Toyota led the market with a 2.8% sales rise to 622,001 units year-to-date, driven by strong light and mini-truck sales, while its Daihatsu subsidiary continued to recover from previous production stoppages, with sales rising by over 11% to 235,246 units. Suzuki’s sales declined by 2.1% to 308,426 units, while Honda’s sales fell by 2.9% to 262,700 units and Nissan’s sales were down by 3% to 179,960 units.
Overseas brands account for around 5% of total vehicle sales in Japan, with sales falling by 6% to 91,370 units year-to-date - comprising mostly German brands such as Mercedes-Benz, BMW-Mini, Audi, and Volkswagen.
GlobalData expects light vehicle sales in the country to decline by over 2% to 4.42 million units in 2026, after sales rose by 3.1% to 4.52 million units in 2025, followed by a 2% rise to 4.51 million units in 2027.
