Japan's new vehicle sales fell 3.4% in October from a year earlier to 381,756 units, industry data released Monday showed, as a 10% slump in minivehicle sales offset a small gain for larger cars.

The decline follows a strong run that had pushed the domestic market to its strongest half-year since before the pandemic. For investors in Asia, Japan's home market is a key earnings base for Toyota Motor, Honda Motor, Suzuki Motor and their parts suppliers, and sales trends at home feed directly into their earnings.

Toyota and kei car makers weigh on Japan's October sales

Sales of registered vehicles, those with engines larger than 660 cubic centimeters, rose 0.5% to 249,180 units, according to the Japan Automobile Dealers Association. Sales of minivehicles, Japan's small "kei" cars and trucks, fell 10.0% to 132,576 units, data from the Japan Light Motor Vehicle and Motorcycle Association showed. Combined, the two associations' figures compare with 395,189 units a year earlier.

Toyota, which sold 119,964 registered vehicles in October, accounted for nearly half of that segment, yet its sales fell 5.8% from a year earlier. Its Lexus luxury brand slipped 0.8% to 7,920 units.

Rivals filled part of the gap. Honda's registered vehicle sales rose 10.3% to 31,576 units, Nissan Motor's climbed 13.3% to 18,027 and Subaru's jumped 54.7% to 10,832. Mazda Motor edged up 1.1%, and Suzuki's registered car sales gained 2.2%.

The shift toward bigger vehicles continued. Sales of cars with engines above 2,000 cc grew 5.4% to 148,824 units, while sales of smaller registered cars fell 7.2% to 67,933. Truck sales dropped 3.9%. Bus sales rose 40.9%, though from a base of under 1,000 vehicles.

Among commercial vehicle makers, Hino Motors' sales rose 21.8% to 3,097 units and Isuzu Motors' rose 1.7%, while Mitsubishi Fuso and UD Trucks posted declines.

Daihatsu leads the minivehicle slide

The minivehicle market, which accounts for roughly a third of Japan's new vehicle sales, had a weak month across nearly every brand. Daihatsu Motor's kei sales fell 17.7% to 47,576 units, and Suzuki's dropped 6.9% to 43,498. Daihatsu remained the segment's largest seller by volume.

Honda's kei sales fell 2.8% to 19,764 units, and Nissan's declined 5.2% to 11,172. Mazda, Toyota and Subaru, which sell far fewer kei cars, also reported lower volumes. Mitsubishi Motors was the only established brand to post a gain, up 0.6% to 4,474 units.

Combining both tables gives a clearer view of brand exposure. Suzuki sold 61,104 vehicles in Japan in October, about 71% of them kei models, so its small gain in registered cars could not offset the kei decline. Honda's combined total of 51,340 units rose, because its registered car growth outweighed the drop in its kei sales.

Kei passenger cars fell 10.4% and kei trucks fell 8.7%, according to the association.

China's BYD appeared in the minivehicle table with 607 units in October, with no year-earlier comparison listed.

The weakness in small cars is not new. Minivehicle sales fell 2.5% in the April-to-September half to 787,886 units, their first decline in two years, Jiji Press reported last month. September alone showed a 0.6% dip. October's double-digit drop marks a sharp acceleration.

Tax relief boost fades for Japanese carmakers

The October figures follow a strong stretch for the overall market. Total new vehicle sales in the April-to-September period rose 5.1% to 2,292,064 units, the highest for that half since 2019, according to the industry associations. Jiji Press attributed much of the strength in larger vehicles to the abolition of the environmental performance tax, a levy on car purchases, at the end of March.

Registered vehicle sales rose for a sixth straight month in September, and total sales grew 1.3% that month to 433,683 units. October extended the gain in registered vehicles to a seventh month, but only just, at 0.5%.

Even with October's fall, combined sales in the first 10 months of 2026 were up 1.7% from a year earlier at 3,927,177 units, based on the two associations' year-to-date figures.

The data adds to a mixed picture of Japanese consumer demand. Separate government figures showed that retail sales fell for a second month in September, even as car production helped lift factory output.

The dealers' and minivehicle associations will release November sales figures in early December, the first read on whether October's drop in kei car demand was a one-month dip or the start of a longer slowdown.