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Passenger Car Market in Japan, 2021/22

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Passenger cars basically mean sedans, hatchbacks, and utility vehicles. Thus, a passenger car market refers to the sales of passenger cars and the organizations, brands, and manufacturers involved along the way.

With the pandemic impacting every industry, global passenger market of 2021 is expected to grow to $1445.1 billion at a Compound Annual Growth Rate (CAGR) of 9.3%. Not just that, now the market is predicted to reach $2 trillion by 2022. This growth predominantly is credited to those upfront challenges COVID-19 which had put global brands in a bit of pickle, resulting in active engagement, efforts, and progress consequently. The leading players are mainly Hyundai Kia, Renault Nissan, Toyota, Volkswagen, and General Motors.

Asia Pacific Region is the largest passenger car market as it accounts for the biggest share of the global market. It had 46% of the market share in 2020 which has certainly increased by a great margin by now.

Japan Passenger Car Market

Japan is home and a haven for car buyers, sellers, and automobile manufacturers. It’s the Japanese automotive technology and engineering that wins the race. Its supply is extended worldwide, exporting half of their domestic production overseas despite the gravity of the foreign market.

Approximately 6.96 million passenger cars were produced in Japan in 2020, down from about 8.33 million units in the previous year. In 2020, the total production volume of the Japanese motor vehicle industry reached slightly more than eight million units, with passenger cars representing the majority of the domestic production output. – Statista

To fulfill the basic utilities and purposes comprising of relatively small distances, the Japanese usually prefer fuel-efficient and economical cars with easy handling for narrow roads and streets of Japan. This is mainly the reason why the Honda N-Box Lightweight is the best-selling mini passenger car of Japan. However, Daihatsu is the leading mini car manufacturer of Japan.

 The Domestic Environment

The Japanese government supports the domestic vehicle technology and promotes its development for innovation. Not just promoting but by adhering to it, and implementing the technologies for autonomous and safe driving. Regulations in Japan are amended with new technological implications like auto-pilots for traffic is legal in the country.

Top Automobile Manufacturers in Japan

In 2020, the ranking of the world’s largest car brands was topped by Toyota with a market share of around 8.5 percent. The Toyota brand is owned by Japan’s Toyota Motor Corporation, the world’s largest motor vehicle manufacturer, surpassing the 2019 incumbent, the Volkswagen Group.Statista

Toyota is the leading automobile/passenger car manufacturer in Japan as of 2020, with 1.45 million automobiles sold. Suzuki, however, secured the 2nd position with nearly 381K vehicles sold.

Popular Car Brands and Models

Foreign brands listed leading players of Japan’s automotive market were premier German brands like Volkswagen, BMW, and Mercedes-Benz. Although, half the ranking of popular car brands comprised of Japanese automotive manufacturers and even though the German brands hold their worth in the country, Japanese consumers prefer their domestic brands and automobile technology at first and foremost. And thus, only Japanese brands made it to the top ten since consumers wanted to invest their hard-earned money in their domestic vehicle technology only.

Even when you’ll look at the best-selling vehicles in Japan, you’ll come across mostly Japan’s brands like Toyota Yaris which was ranked first, Toyota Raize second, and Honda Corolla held the third rank. Nissan, however, was also within the ranking as the odd one out.

Future Trends of Japan’s Market

The future trends of the Japanese automotive market are imagined with battery electric vehicles (BEV), plug-in hybrids (PHEV), hybrid electric vehicles, diesel and fuel cell vehicles at-large. However, Japanese manufacturers are skeptic about BEVs and mostly favor gasoline-electric hybrid instead. Their favor accounts for the fact that EVs are only as eco-friendly as their production process, which highlights a state of critical but healthy debate. Also, the Japanese government cautious of the shift to full EVs which will bring its part of the damage on different sectors of the industries. As per climate goals, the major markets of the automobile industry will probably depend on fossil fuels up until 2050.

Although they might adopt hydrogen fuel cell cars for longer terms in support of zero-emission market, leaving behind the hassles of battery electric vehicles. However, for now, the sales of Japanese hybrids are expected to grow exponentially.

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