Japan Auto Market lost momentum in 2024, falling 6.7% and remaining stuck below the pre-pandemic 4-million treshold. Despite losing 12.3%, Toyota secured its dominant spot, well ahead of Honda and Suzuki.
Market Trend and Outlook
Japan’s economy is projected to grow by 1.2% year-over-year in 2025, exceeding 1% growth, driven primarily by domestic demand over exports. Core inflation is expected to reach 2.1%, supported by steady wage growth, strong corporate profits, and labor shortages, fostering a positive cycle of rising wages and inflation. The Bank of Japan (BoJ) is likely to gradually raise its policy rate to 1% by year-end 2025, balancing caution over global trade risks and yen stability. Limited Federal Reserve easing may weaken the yen, giving the BoJ more room for rate hikes.
Unemployment is forecast to remain low at 2.4%, with labor shortages persisting despite increased participation by women, older workers, and foreign labor, keeping upward pressure on wages. Wage growth and consumer confidence are recovering after years of stagnation. Rising wages, supported by favorable spring wage negotiations, are boosting private consumption, with consumer confidence nearing a three-year high in 2024.
Down for the first time since 2021, the EV segment in Japan fell 5% in 2024. Stuck at just 2.5% of total car sales, it failed to gain traction due to factors such as consumer preferences towards hybrid and lack of infrastructures.
Only Mitsubishi on top stood out with impressive growth of 47.9%, while all other top EV brands, including Nissan, Toyota, and BMW, suffered double-digit losses.
Although the car market has been able to recover later in 2024 despite a challenging first half, full-year sales dropped 6.7% in 2024 compared to the prior year, reaching 3,72 million units.
Looking at cumulative data up to December 2024, brand-wise Toyota maintained 1st place with 1,20 million sales (-12.3%), followed by Honda at 637,742 (+13%), Suzuki at 598,501 registrations (+14.8%), Nissan -up 1 spot- at 398,488 (-0.5%), Daihatsu -down 1 spot- with 235,227 sales (-45.1%), Mazda at 131,868 (-20.5%) and Mitsubishi -up 2 spots- with 104,805 new registrations (+11.5%).
Subaru fell 1 spot into 8th with 97,995 sales (-0.6%), in front of Lexus -down 1 spot- with 86,701 sales (-9.1%) and Mercedes, which closed the Top 10 with 53,195 new car registrations (+3.8%).
Looking at specific models, reported in the dedicated article, the Honda N-Box was still the best seller despite a 10.9% decrease in year-on-year sales, followed by the Toyota Corolla -up 2 spots- which grew 7.8%.
Medium-Term Market Trend
The Japanese auto-market in the last decade hasn’t performed amazingly, with its last great surge dating back to 2012 (+28.7%) and the current all time high being set in 2014 when 4.7 million yearly sales were registered. Sales fluctuated above 4 million sales up to 2019.
With the global pandemic in 2020 the entire world economy slowed down drastically, stores and manufactures closing down and most economies taking a beating. The Japanese auto market was no exception falling 11.1% and bringing sales below the 4 million mark. Although the Japanese market did drop compared to other economies it stood its ground relatively well.
In the last few years the Japanese auto market hasn’t completely recovered from the fall in 2020, with yearly sales not surpassing the 4 million. External factors are to blame for this fall in demand for automotives: firstly the lack of raw materials has lead car manufacturers to raise prices and waiting times for cars; another reason is that more and more manufacturers are pushing towards electric that on average costs much more than a diesel or petrol car. This being said despite the terrible performance in 2022, the Japanese market still maintains one of the largest auto markets in the world.
In 2023 total sales were 3.99 million units, a 15.8% increase compared to the previous year.
Tables with sales figures
In the tables below we report sales for all Brands, top 10 Manufacturers Group and top 10 Models.
