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The automotive industry in Japan is one of the most prominent and largest industries in the world. has been in the top three of the countries with the most cars manufactured since the 1960s, surpassing Germany. The automotive industry in Japan rapidly increased from the 1970s to the 1990s (when it was oriented both for domestic use and worldwide export) and in the 1980s and 1990s, overtook the U.S. as the production leader with up to 13 million cars per year manufactured and significant exports. After massive ramp-up by China in the 2000s and fluctuating U.S. output, Japan is currently the third largest automotive producer in the world with an annual production of 9.9 million automobiles in 2012. Toyota raises profits forecast as recovery continues Https://www.bbc.co.uk/news/business-16923619< /ref> Japanese investments helped grow the auto industry in many countries throughout the last few decades.

Japanese business conglomerates began building their first automobiles in the middle to late 1910s. The companies went about this by either designing their own trucks (the market for passenger vehicles in Japan at the time was small), or partnering with a brand to produce and sell their cars in Japan under license. Such examples of this are partnering with (UK), partnering with British automaker Austin, and the Mitsubishi Model A, which was based upon the Tipo 3. The demand for domestic trucks was greatly increased by the Japanese military buildup before World War II, causing many Japanese manufacturers to break out of their shells and design their own vehicles. In the 1970s Japan was the pioneer in the use of in the manufacturing of vehicles.

The country is home to a number of companies that produce cars, construction vehicles, motorcycles, ATVs, and engines. Japanese automotive manufacturers include , , , , , , Mitsubishi, , , , Kawasaki, Yamaha, and . , , and are luxury brands of Nissan, Honda and Toyota, respectively.

Cars designed in Japan have won the European Car of the Year, International Car of the Year, and World Car of the Year awards many times. Japanese vehicles have had worldwide influence, and no longer have the stigma they had in the 1950s and 1960s when they first emerged internationally, due to a dedicated focus on continual product and process improvement led by Toyota as well as the use of the technique and the early adoption of the Lean Six Sigma methodology. Japanese cars are also built in compliance with Japanese Government dimension regulations and engine displacement is further regulated by road tax bracket regulations, which also affects any imported cars sold in Japan.

History
Early years
In 1904, Torao Yamaha produced the first domestically manufactured bus, which was powered by a steam engine. In 1907, Komanosuke Uchiyama produced the Takuri, the first entirely Japanese-made gasoline engine car. The Kunisue Automobile Works built the Kunisue in 1910, and the following year manufactured the Tokyo in cooperation with Tokyo Motor Vehicles Ltd. In 1911, Kaishinsha Motorcar Works was established and later began manufacturing a car called the DAT. In 1920, Jitsuyo Jidosha Seizo Co., founded by William R. Gorham, began building the Gorham and later the Lila. The company merged with Kaishinsha in 1926 to form the DAT Automobile Manufacturing Co. (later to evolve into ). From 1924 to 1927, Hakuyosha Ironworks Ltd. built the Otomo. , a textile manufacturer, began building cars in 1936. Most early vehicles, however, were trucks produced under military subsidy. Isuzu, and initially focused on development.

Cars built in Japan before World War II tended to be based on European or American models. The 1917 Mitsubishi Model A was based on the A3-3 design. (This model was considered to be the first mass-produced car in Japan, with 22 units produced.) In the 1930s, ' cars were based on the Austin 7 and designs, while the model was based on the . built cars in the 1930s based on Ford models, while and , a predecessor of Isuzu, built cars resembling products , and 1930s LaSalle. The New Illustrated Encyclopedia of Automobiles by David Burgess Wise; Wellfleet Press; Secaucus, New Jersey 1992 Automobiles of the World by Joseph H. Wherry; Chilton Book Company; Philadelphia, Pennsylvania 1968

Automobile manufacture from Japanese companies was struggling, despite investment efforts by the Japanese Government. The 1923 Great Kantō earthquake devastated most of Japan's fledgling infrastructure and truck and construction equipment manufacturing benefited from recovery efforts. Yanase & Co., Ltd. (株式会社ヤナセ Yanase ) was an importer of American-made cars to Japan and contributed to disaster recovery efforts by importing GMC trucks and construction equipment. By bringing in American products, Japanese manufacturers were able to examine the imported vehicles and develop their own products.

Transportation and mobilization in the early 1900s was largely monopolized by the Japanese Government's Ministry of Railways, and private automobile companies emerged to further modernize the transportation infrastructure.

From 1925 until the beginning of World War II, Ford and GM GM early history in Japan had factories in the country and they dominated the Japanese market. The Ford Motor Company of Japan was established in 1925 and a production plant was set up in Yokohama. established operations in Osaka in 1927. also came to Japan and set up Kyoritsu Motors. Between 1925 and 1936, the Big Three automakers' Japanese subsidiaries produced a total of 208,967 vehicles, compared to the domestic producers total of 12,127 vehicles. In 1936, the Japanese government passed the Automobile Manufacturing Industry Law, which was intended to promote the domestic auto industry and reduce foreign competition; ironically, this stopped the groundbreaking of an integrated Ford plant in Yokohama, modeled on in England and intended to serve the Asian market, that would have established Japan as a major exporter. Instead by 1939, the foreign manufacturers had been forced out of Japan. Under the direction of the Imperial Japanese Government, the fledgling vehicle production efforts were redirected to heavy duty truck production due to the Second Sino-Japanese War and the was the result of three Japanese companies combining efforts to manufacture a standardized, military grade heavy duty truck. Cars of the Thirties and Forties by Michael Sedgwick; Crescent Books; "Remade in Japan" Los Angeles Times June 6, 1996 http://articles.latimes.com/1996-06-02/business/fi-11017_1_japanese-auto

During World War II, Toyota, Nissan, Isuzu and Kurogane built trucks and motorcycles for the Imperial Japanese Army, with Kurogane introducing the world's first mass-produced four-wheel-drive car, called the Kurogane Type 95 in 1936. For the first decade after World War II, auto production was limited, and until 1966 most production consisted of trucks (including three-wheeled vehicles). Thereafter passenger cars dominated the market. Japanese car designs also continued to imitate or be derived from European and American designs. Exports were very limited in the 1950s, adding up to only 3.1% of the total passenger car production of the decade.

1960s to today
In the 1960s Japanese manufacturers began to compete head-on in the domestic market, model for model. This was exemplified by the "CB-war" between the most popular compact sedans called the and the . While this initially led to benefits for consumers, before long R&D expenditures swelled and other companies offered competing compact sedans from Mazda, Subaru, Isuzu, Daihatsu and Mitsubishi. Towards the late 1980s and early 1990s Japanese automobile manufacturers had entered a stage of "Hyper-design" and "Hyper-equipment"; an arms race leading to less competitive products albeit produced in a highly efficient manner.

During the 1960s, Japanese automakers launched a bevy of new in their domestic market; scooters and motorcycles remained dominant, with sales of 1.47 million in 1960 versus a mere 36,000 kei cars. These tiny automobiles usually featured very small engines (under 360cc, but were sometimes fitted with engines of up to 600cc for export) to keep taxes much lower than larger cars. The average person in Japan was now able to afford an automobile, which boosted sales dramatically and jumpstarted the auto industry toward becoming what it is today. The first of this new era, actually launched in 1958, was the Subaru 360. It was known as the "Lady Beetle", comparing its significance to the Volkswagen Beetle in . Other significant models were the , Daihatsu Fellow Max, Mitsubishi Minica, , and the Honda N360.

The keis were very minimalist motoring, however, much too small for most family car usage. The most popular economy car segment in the sixties was the 700-800 cc class, embodied by the , Mitsubishi Colt 800, and the original . By the end of the sixties, however, these (often two-stroke) cars were being replaced by full one-litre cars with four-stroke engines, a move which was spearheaded by Nissan's 1966 Sunny. All other manufacturers quickly followed suit, except for Toyota who equipped their with a 1.1-litre engine - the extra 100 cc were heavily touted in period advertising. These small family cars took a bigger and bigger share of an already expanding market. All vehicles sold in Japan were taxed yearly based on exterior dimensions and engine displacement. This was established by legislation passed in 1950 that established tax brackets on two classifications; dimension regulations and engine displacement. The taxes were a primary consideration as to which vehicles were selected by Japanese consumers, and guided manufacturers as to what type of vehicles the market would buy.

Export expansion
Exports of passenger cars increased nearly two hundred-fold in the sixties compared to the previous decade, and were now up to 17.0 percent of the total production. This though, was still only the beginning. Rapidly increasing domestic demand and the expansion of Japanese car companies into foreign markets in the 1970s further accelerated growth. Effects of the 1973 Arab Oil Embargo accelerated vehicle exports along with the exchange rate of the Japanese yen to the U.S. Dollar, UK Pound, and West German Deutsche Mark. Passenger car exports rose from 100,000 in 1965 to 1,827,000 in 1975. Automobile production in Japan continued to increase rapidly after the 1970s, as Mitsubishi (as vehicles) and Honda began selling their vehicles in the US. Even more brands came to America and abroad during the 1970s, and by the 1980s, the Japanese manufacturers were gaining a major foothold in the US and world markets.

In the early 1970s, the Japanese electronics manufacturers began producing integrated circuits (ICs), and for the automobile industry, including ICs and microcontrollers for in-car entertainment, automatic wipers, electronic locks, dashboard, and engine control. The Japanese automobile industry widely adopted ICs years before the American automobile industry.

Japanese cars became popular with buyers in the early 1970s, with badged cars (the Nissan brand was not used on British registered models until 1983) proving especially popular and earning a reputation in Britain for their reliability and low running costs, although rust was a major problem. Exports were successful enough that Japanese cars were considered a severe threat to many national car industries, such as Italy, France, the United Kingdom, as well as the United States. Import quotas were imposed in several countries, limiting the sales of Japanese-made cars to 3 percent of the overall market in France and 1.5 percent in Italy. As for the United States, the Japanese government was pressured to agree to annual export quotas beginning in 1981. In other countries, such as the United Kingdom, Japanese importers made gentlemen's agreements to limit import in an effort to forestall stricter official quotas. As a result, Japanese manufacturers expanded local production of cars, establishing plants across North America and Europe while also taking advantage of plants already created in third countries not covered by the quotas. Thus, South African-built were sold in Italy and a number of Australian-made Mitsubishis found their way to North America and Europe.

World leader
With Japanese manufacturers producing very affordable, reliable, and popular cars throughout the 1990s, Japan became the largest car producing nation in the world in 2000. However, its market share has decreased slightly in recent years, particularly due to old and new competition from South Korea, China and India. Nevertheless, Japan's car industry continues to flourish, its market share has risen again, and in the first quarter of 2008 Toyota surpassed American to become the world's largest car manufacturer. Today, Japan is the third largest automobile market (below the and ) and is the second largest car producer in the world with its branded cars being among the most used ones internationally. Automobile export remains one of the country's most profitable exports and is a cornerstone of recovery plan for the latest economic crisis. In 2019 Japan was the second largest car exporter in the world.

Timeline
  • 1907 - established
  • 1911 - Kaishinsha Motorcar Works established
  • 1917 - Mitsubishi Motors' first car
  • 1917 - Nippon Internal Combustion Engine Co. Ltd. established (integrated into )
  • 1918 - 's first car
  • 1920-1925 - Gorham/Lila - auto production established (merged into )
  • 1924-1927 - Otomo built at the Hakuyosha Ironworks in Tokyo
  • 1931 - - by Toyo Kogyo corp, later
  • 1934-1957 - begins auto production
  • 1936 - Kurogane Type 95 world's first four-wheel-drive car manufactured
  • 1936 - 's first car ()
  • 1952-1966 - Prince Motor Company (integrated into Nissan)
  • 1953-1967 - starts auto production (merged into Toyota)
  • 1954 - 's first car (Subaru P-1)
  • 1955 - 's first car ()
  • 1957 - 's first car ()
  • 1963 - 's first production car (Honda S500)
  • 1966 - One of the best selling cars of all time, the , is introduced; Nissan opens its first North American manufacturing facility in Cuernavaca, Mexico as Nissan Mexicana
  • 1967 - Japan Automobile Manufacturers Association (JAMA) is founded
  • 1967 - was one of the first two mass-produced cars with rotary engine
  • 1977 - Voluntary Export Restraints limit exports to the United Kingdom for five years; the deal was renewed until 1999
  • 1980 - Japan surpassed the United States and became first in auto manufacturing; Nissan USA breaks ground for its Smyrna, Tennessee, manufacturing plant
  • 1981 - Voluntary Export Restraints from May limit exports to to 1.68 million cars per year; redundant by 1990 as production inside US displaces direct exports; similar policies in several EU countries
  • 1982 - first car (BUBU shuttle 50)
  • 1991 - was one of the first (combined with Wankel rotary) car
  • 1997 - was the first mass-produced car
  • 2004 - Mitsubishi defects cover-up scandal
  • 2006 - Japan surpassed the United States and became first in auto manufacturing again
  • 2008 - Toyota surpassed to become the world's largest car manufacturer.
  • 2008 - Japanese automotive industry afflicted by the financial crisis caused by the for the first time.
  • 2009 - Japan was surpassed by China and became second in automotive manufacturing.
  • 2010 - 2009–2010 Toyota vehicle recalls
  • 2011 - March 2011 earthquake and tsunami and the Fukushima nuclear disaster affects Japanese automotive production for the second time.
  • 2012 - At the beginning of from 2012 to 2020, Japanese Prime Minister 's program to help the country's economic recovery including the automotive industry: Japanese economics side is one part of a more general program, which was commented on by .
  • 2020 - COVID-19 pandemic affects Japanese automotive production for the third time, which Japan had encountered its worst economic crisis since the end of World War II.

Statistics
Production volumes by manufacturer
The following are vehicle production volumes for Japanese vehicle manufacturers, according to the Japan Automobile Manufacturers Association (JAMA).

+ Passenger cars
+ Trucks
+ Buses

Sales rank
Regular cars
1990Toyota Mark II
1991Toyota CorollaToyota Mark IIHonda CivicToyota CrownToyota CarinaNissan SunnyToyota CoronaToyota StarletToyota Sprinter
1992Toyota CorollaToyota Mark IIToyota CrownHonda CivicNissan SunnyToyota StarletToyota CarinaToyota CoronaToyota Sprinter
1993Toyota CorollaToyota Mark IINissan MarchNissan SunnyToyota CrownHonda CivicToyota StarletToyota SprinterToyota Carina
1994Toyota CorollaToyota Mark IINissan MarchHonda CivicToyota CrownNissan SunnyToyota EstimaToyota StarletToyota CarinaToyota Sprinter
1995Toyota CorollaNissan MarchToyota CrownHonda OdysseyToyota Mark IIHonda CivicToyota EstimaNissan SunnyToyota StarletToyota Sprinter
1996Toyota CorollaToyota CrownNissan MarchToyota StarletToyota Mark IIHonda OdysseyToyota EstimaNissan Sunny
1997Toyota CorollaNissan MarchToyota Mark IIToyota StarletToyota CrownToyota EstimaHonda Odyssey
1998Toyota CorollaMazda DemioNissan MarchToyota StarletHonda StepwgnToyota Mark IIToyota CrownMitsubishi Chariot GrandisNissan Sunny
1999Toyota CorollaHonda StepwgnToyota CrownMazda DemioNissan CubeToyota Mark IISubaru LegacyNissan MarchToyota TownAce Noah
2000Toyota CorollaToyota VitzToyota EstimaHonda OdysseyToyota CrownNissan CubeHonda StepwgnMazda Demio
2001Toyota CorollaToyota VitzToyota EstimaHonda StepwgnToyota CrownNissan CubeHonda OdysseyToyota FunCargo
2002Toyota CorollaNissan MarchToyota VitzToyota EstimaNissan Cube
2003Toyota CorollaHonda FitNissan CubeNissan MarchToyota IstMazda DemioToyota NoahToyota Estima
2004Toyota CorollaHonda FitNissan CubeToyota WishToyota CrownNissan MarchHonda OdysseyToyota IstToyota AlphardToyota Noah
2005Toyota CorollaToyota VitzHonda FitToyota WishHonda StepwgnToyota AlphardToyota Crown
2006Toyota CorollaToyota VitzHonda FitToyota EstimaHonda StepwgnToyota WishToyota PassoToyota Crown
2007Toyota CorollaToyota VitzHonda FitToyota PassoNissan SerenaToyota EstimaToyota VoxyMazda DemioNissan TiidaToyota Noah
2008Honda FitToyota CorollaToyota VitzToyota CrownNissan SerenaToyota PassoToyota VoxyNissan TiidaMazda Demio
2009Toyota VitzHonda FitToyota VitzToyota PassoToyota CorollaNissan SerenaToyota VoxyNissan Note
2010Toyota PriusHonda FitToyota VitzToyota CorollaHonda FreedToyota PassoHonda StepwgnNissan SerenaToyota VoxyNissan Note
2011Toyota PriusHonda FitToyota VitzNissan SerenaToyota CorollaHonda FreedMazda DemioToyota RactisToyota PassoNissan March
2012Toyota PriusHonda FitHonda FreedToyota VitzNissan SerenaNissan NoteToyota CorollaHonda Stepwgn
2013Toyota AquaToyota PriusHonda FitNissan NoteToyota CorollaNissan SerenaToyota VitzToyota CrownHonda FreedHonda Stepwgn
2014Toyota AquaHonda FitToyota PriusToyota CorollaToyota VoxyNissan NoteToyota VitzNissan SerenaToyota Noah
2015Toyota AquaToyota PriusHonda FitToyota CorollaNissan NoteToyota VoxyToyota VitzMazda DemioHonda Vezel
2016Toyota PriusToyota AquaToyota SientaHonda FitNissan NoteToyota VoxyToyota CorollaHonda VezelNissan SerenaToyota Vitz
2017Toyota PriusNissan NoteToyota AquaHonda FreedHonda FitToyota SientaToyota VitzToyota VoxyNissan Serena
2018Nissan NoteToyota AquaToyota PriusNissan SerenaToyota SientaToyota VoxyHonda FitToyota CorollaToyota Vitz
2019Toyota PriusNissan NoteToyota SientaToyota CorollaToyota AquaNissan SerenaToyota RoomyToyota VoxyHonda FreedToyota Vitz
2020Toyota CorollaHonda FitToyota AlphardToyota RoomyHonda FreedToyota SientaNissan NoteToyota Voxy
2021Toyota YarisToyota RoomyToyota CorollaToyota AlphardNissan NoteToyota RaizeToyota AquaToyota VoxyHonda Freed
2022Toyota YarisToyota CorollaNissan NoteToyota RoomyToyota RaizeHonda FreedToyota AquaToyota SientaHonda FitToyota Alphard
2023Toyota YarisToyota CorollaToyota SientaNissan NoteToyota RoomyToyota PriusToyota NoahToyota VoxyToyota AquaHonda Freed
See also : Best-selling models in

Kei cars
2005Suzuki Wagon RHonda That's
2006Suzuki Wagon RDaihatsu MoveSuzuki AltoDaihatsu TantoHonda LifeDaihatsu MiraMitsubishi eKNissan MocoSuzuki MR Wagon
2007Suzuki Wagon RDaihatsu MoveDaihatsu TantoDaihatsu MiraHonda LifeSuzuki AltoNissan MocoMitsubishi eKHonda Zest
2008Suzuki Wagon RDaihatsu MoveDaihatsu TantoHonda LifeDaihatsu MiraSuzuki PaletteSuzuki AltoNissan MocoMitsubishi eKSubaru Stella
2009Suzuki Wagon RDaihatsu MoveDaihatsu TantoDaihatsu MiraSuzuki AltoSuzuki PaletteHonda LifeHonda ZestNissan Moco
2010Suzuki Wagon RDaihatsu TantoDaihatsu MoveSuzuki AltoDaihatsu MiraSuzuki PaletteHonda LifeNissan MocoNissan RooxHonda Zest
2011Suzuki Wagon RDaihatsu MoveDaihatsu TantoDaihatsu MiraSuzuki AltoHonda LifeNissan MocoSuzuki PaletteNissan RooxMitsubishi eK
2012Daihatsu MiraSuzuki Wagon RDaihatsu TantoDaihatsu MoveSuzuki AltoNissan MocoSuzuki PaletteNissan RooxHonda Life
2013Honda N-BoxDaihatsu MoveSuzuki Wagon RDaihatsu MiraDaihatsu TantoSuzuki AltoNissan Moco
2014Daihatsu TantoHonda N-BoxSuzuki Wagon RNissan DayzDaihatsu MiraDaihatsu MoveSuzuki SpaciaSuzuki Alto
2015Honda N-BoxDaihatsu TantoNissan DayzDaihatsu MoveSuzuki AltoSuzuki Wagon RHonda N-WGNSuzuki HustlerDaihatsu MiraSuzuki Spacia
2016Honda N-BoxDaihatsu MoveNissan DayzDaihatsu TantoSuzuki AltoHonda N-WGNSuzuki HustlerSuzuki SpaciaDaihatsu MiraSuzuki Wagon R
2017Honda N-BoxDaihatsu MoveDaihatsu TantoNissan DayzSuzuki Wagon RSuzuki SpaciaDaihatsu MiraSuzuki AltoHonda N-WGNSuzuki Hustler
2018Honda N-BoxSuzuki SpaciaNissan DayzDaihatsu TantoDaihatsu MoveDaihatsu MiraSuzuki Wagon RSuzuki HustlerSuzuki AltoHonda N-WGN
2019Honda N-BoxDaihatsu TantoSuzuki SpaciaNissan DayzDaihatsu MoveDaihatsu MiraSuzuki Wagon RSuzuki AltoSuzuki HustlerMitsubishi eK
2020Honda N-BoxSuzuki SpaciaDaihatsu TantoDaihatsu MoveNissan DayzSuzuki HustlerDaihatsu MiraHonda N-WGNSuzuki Wagon R
2021Honda N-BoxSuzuki SpaciaDaihatsu TantoDaihatsu MoveNissan RooxSuzuki HustlerSuzuki Wagon RDaihatsu MiraDaihatsu TaftSuzuki Alto
2022Honda N-BoxDaihatsu TantoSuzuki SpaciaDaihatsu MoveSuzuki Wagon RNissan RooxSuzuki HustlerSuzuki AltoDaihatsu MirrorDaihatsu Taft
See also : Best-selling models in

See also
  • List of automobile manufacturers of Japan
  • Automotive industry
  • Japanese used vehicle exporting
  • Timeline of Japanese automobiles

Notes
Further reading
  • Odaka, Konosuke. The automobile industry in Japan : a study of ancillary firm development (1988) online
  • (1984). 9780525242895, E. P. Dutton. .
  • (2024). 9780786417346, McFarland & Company. .
  • (1986). 9780517617779, Portland House.
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