Quick Takeaways
- Japan’s vehicle market returned to growth in 2025 after prolonged disruption, supported by production normalization and recovering supply chains.
- Outlook for 2026 remains positive, driven by model refresh cycles and tax-driven purchase acceleration.
Recently, Japan new vehicle sales recorded a moderate recovery in 2025, signaling a return to growth after two consecutive years of decline. Total sales of registered vehicles and kei cars reached 4,565,777 units, reflecting a 3.3% year-on-year increase and marking the first annual rise since 2023.
The initial momentum was largely driven by developments in the first half of the year. Between January and June, sales volumes significantly outperformed 2024 levels as automakers resumed normal shipments following earlier production suspensions. These suspensions had stemmed from certification-related irregularities that disrupted supply chains in the prior year.
Japan New Vehicle Sales Trends in 2025
As production normalized, pent-up demand contributed to stronger registrations during the early months. However, the recovery lost pace during the second half of the year. With the impact of delayed shipments fading, market growth moderated, resulting in only a modest overall annual increase despite the strong start.
Key factors shaping sales performance included:
Japan New Vehicle Sales Outlook for 2026
Looking ahead, Japan new vehicle sales are projected to maintain a positive trajectory in 2026, even as some supply-side risks persist. Automakers are expected to introduce full model changes across several flagship vehicles, which could stimulate replacement demand and showroom traffic.
Another supportive factor is the anticipated removal of Japan’s eco-performance tax incentives. The policy change is expected to accelerate purchase decisions, particularly for buyers delaying upgrades. Together, new model launches and tax adjustments are likely to offset lingering supply constraints and support market expansion in the coming year.
The initial momentum was largely driven by developments in the first half of the year. Between January and June, sales volumes significantly outperformed 2024 levels as automakers resumed normal shipments following earlier production suspensions. These suspensions had stemmed from certification-related irregularities that disrupted supply chains in the prior year.
Japan New Vehicle Sales Trends in 2025
As production normalized, pent-up demand contributed to stronger registrations during the early months. However, the recovery lost pace during the second half of the year. With the impact of delayed shipments fading, market growth moderated, resulting in only a modest overall annual increase despite the strong start.
Key factors shaping sales performance included:
- Recovery from certification-related shipment disruptions
- Stabilization of domestic vehicle supply
- Gradual normalization of consumer demand
Japan New Vehicle Sales Outlook for 2026
Looking ahead, Japan new vehicle sales are projected to maintain a positive trajectory in 2026, even as some supply-side risks persist. Automakers are expected to introduce full model changes across several flagship vehicles, which could stimulate replacement demand and showroom traffic.
Another supportive factor is the anticipated removal of Japan’s eco-performance tax incentives. The policy change is expected to accelerate purchase decisions, particularly for buyers delaying upgrades. Together, new model launches and tax adjustments are likely to offset lingering supply constraints and support market expansion in the coming year.
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