Japan Auto Market in 2025 is slowing down. YTD sales up to November gained 3.2%, confirming deceleration trend of previous months. Daihatsu is once again the standout in an uneventful top 10, climbing 1 spot and growing 67.9%.
Economic Environment
Japan’s economy remains resilient, with both the IMF and Vanguard noting solid domestic demand, improving real wages, and supportive inflation dynamics despite trade-related headwinds. The IMF has revised Japan’s 2025 growth forecast up to 1.1%, reflecting stronger consumption and investment momentum, while analysts highlight persistent structural labor shortages that continue to push wages and prices higher.
Although yen depreciation and U.S. tariffs pose near-term risks, a recent U.S.–Japan trade deal and robust wage growth are helping cushion the impact on exports and household spending. With inflation staying above 2% and underlying price pressures intact, the Bank of Japan is expected to continue normalizing policy, beginning with a possible rate hike in December 2025 and gradually lifting rates toward the IMF’s projected neutral level of 1.5% over the medium term. However, the pace of tightening will ultimately depend on the durability of wage gains and household consumption as the BoJ gauges whether Japan’s shift toward a sustainable inflation environment can be maintained.
Automotive Industry Trend and Outlook
The Japanese Car Market slows down its expansion in 2025. YTD sales up to November reported a year-on-year increase in volume of 3.2%, falling for the eight consecutive month. and reaching 3,55 million units.
Brand-wise, Toyota maintained 1st place with a share of 32.6% (+3.2%), followed by Suzuki -up 1 spot- in 2nd with a share of 16.1% (+3.2%), Honda -down 1 spot- in 3rd (-8%), Daihatsu -up 1 spot- in 4th (+67.9%), Nissan -down 1 spot- in 5th (-17.4%), Mazda ranked in 6th (+6.4%) and Mitsubishi in 7th (+1.6%).
Subaru ranked into 8th (+7.4%), in front of Lexus into 9th (-0.1%) and Mercedes in 10th (-3.9%).
Looking at specific models, reported in the dedicated article, the Honda N-Box was still the best seller, despite a 2.9% decrease in year-on-year sales, followed by the Toyota Yaris which grew 2.7%.
EV Market Trend and Outlook
Despite the favourable outlook, Japan’s EV market keeps struggling, losing 9.6% up to November 2025 and accounting for just 2% of total car sales. With one of the lowers EV share among Asian markets, local giants still struggle to gain traction and to accurately target consumer preferences.
Mitsubishi led EV sales despite a 4.7% drop, followed by Nissan and Mitsubishi. Toyota surged into 4th while Tesla lost further ground in a market already dominated by domestic brands.
Medium-Term Market Trend
Over the past decade, Japan’s auto market has struggled to regain its former strength. The industry peaked in 2018, but overall sales volume has declined by 13.3% compared to 2014.
The global pandemic in 2020 further disrupted the market, as widespread shutdowns of businesses and manufacturers led to an 11.1% decline in sales. Negative growth persisted until 2023, with the recovery proving sluggish, as the market failed to surpass the 4-million-unit sales threshold following the 2020 downturn. In 2023, a rebound appeared, with sales rising 15.8% to 3.99 million units. However, in 2024, the market took another hit, impacted by rising costs driven by geopolitical risks and fluctuating inflation.
The EV segment, while growing significantly over the decade, remains underdeveloped compared to other major economies. It first gained traction in 2022, saw sales more than double in 2023, but then declined by 5% in 2024. A combination of factors explains Japan’s cautious approach to EV adoption, including a consumer preference for hybrids, limited supply chain investments, and energy security concerns that have led to a stronger focus on hydrogen technology rather than full electrification.
Tables with sales figures
In the tables below we report sales for all Brands, top 10 Manufacturers Group and top 10 Models.
