Japanese automakers face production declines amid earthquake and market shifts

Japanese automakers experienced a decline in global production in August 2026, with total output falling by 4.1% year-on-year to approximately 1.74 million units. This downturn was driven by a combination of the Kumamoto earthquake in late July, which disrupted supply chains for manufacturers with operations in Kyushu—such as Toyota, Honda, Nissan, and Daihatsu—and a significant slowdown in the Chinese market.

In China, production fell by 35.9% compared to the previous year, as rising fuel prices and increased competition from local electric vehicle manufacturers impacted demand. Honda and Daihatsu saw particularly sharp decreases in domestic production, dropping 32.3% and 23.0% respectively.

Separately, Honda’s two-wheeler division continues to hold a dominant global market share of approximately 40%, selling 22.1 million units in the fiscal year ending March 2026. Despite this leadership, the company faces intensifying competition from Chinese manufacturers offering high-spec, low-cost models, and Indian brands expanding their global presence. Honda anticipates the global two-wheeler market will grow to 60 million units annually by 2030, driven by demand in the Global South.