Market Overview

In 2024, the volume of used car retail sales was estimated at approximately 2,508 thousand units, severely constrained by a slump in new car sales, which fell to　4,421 thousand units (92.5% of the previous year)*1. This shortage was further exacerbated by robust export demand, which diverted inventory away from the domestic market. However, 2025 saw a recovery in new car sales to 4,566 thousand units (103.3% of the preceding year)*1, signaling a gradual easing of the chronic inventory shortage that has plagued the industry.
Despite this recovery, used car prices remain elevated. Driven by resilient demand both domestically and internationally, both the average purchase price and total retail volume for used cars in 2025 are projected to surpass the previous year’s levels.
A structural shift in consumer behavior is driving the trend. As wage growth lags behind rising vehicle prices and broader inflation, replacement cycles are stretching, keeping new car sales persistently below 5 million units.
Although total vehicle registrations remain broadly stable, kei cars (minicars) now account for over 40% of the market. Coupled with the outflow of high-quality, late-model vehicles amid a weak yen, Japan’s used car distribution structure is entering a clear phase of transition.

(*1 Source: Japan Automobile Dealers Association [JADA], Zenkeijikyo)

Noteworthy Topics

Used Car Exports Expected to Achieve Record High for 2025 with African Nations as Key Destinations

The cumulative volume of used car exports reached 1,562 thousand units for 2025 (as of November 2025)*2. This figure closely approaches the total of 1,573 million units recorded for 2024*2, achieving a new historical record highly probable by year-end.
This growth is primarily driven by the stabilization of maritime logistics and the easing of container freight costs, both of which had weighed heavily on the market in the previous year. Furthermore, the persistent weakness of the yen has acted as a significant tailwind, enhancing the price competitiveness of Japanese used vehicles in overseas markets.
Regarding trends by destination, the United Arab Emirates (UAE) is projected to secure the top position for the second consecutive year. Benefiting from stabilized container pricing, the UAE has strengthened its role as a strategic re-export hub catering to demand from African nations and Russia, thereby providing a powerful engine for overall export growth. Additionally, exports to Russia—the second-largest destination—have remained robust, further bolstering the industry's performance.
In addition, the expansion into emerging economies such as Tanzania (3rd), Chile (4th), and Kenya (5th) is particularly notable. With African countries accounting for approximately 30% of the top 20 nations, it is becoming increasingly clear that the region will serve as a key driver of future growth.

(*2 Source: Trade Statistics, Ministry of Finance)

Future Outlook

With the new car market expected to contract, automakers and franchised dealers are stepping up their focus on the used car business to sustain and grow both customer base and revenue.
At the same time, used car dealers are expanding large-format outlets and bolstering ancillary services. However, those heavily dependent on auto auctions (AA) for sourcing are coming under financial pressure as procurement costs surge.
Competition for market leadership in the used car sector is intensifying across the board. To stand out, players must secure a steady supply of high-quality vehicles through direct sourcing from end users, while deepening customer loyalty via stronger after-sales services. Executed consistently, these initiatives will form a competitive edge.

Research Outline