Market Overview

In 2025, the automotive aftermarket grew by 6.1% year-over-year, reaching 23,477,800 million yen. While new car sales rebounded following the resolution of the 2024 safety certification scandals, consumers faced relentless price hikes driven by surging raw material and labor costs. Overall vehicle upkeep expenses climbed steadily due to similar increases in maintenance-related expenditures, including mandatory vehicle inspections (shaken), servicing fees, and insurance premiums.
At the same time, soaring new car prices have extended vehicle lifespans and average vehicle ages. While this has driven up demand for maintenance and repairs, the supply of qualified mechanics is reportedly declining.

These shifting market dynamics are impacting all segments of the automotive aftermarket. High new car prices, bolstered by strong overseas export demand, have fueled the market for used cars, keeping transaction prices elevated. Consumer preferences continue to shift from ownership to usership, and have driven the expansion of auto leasing, car rentals, and car sharing. The direct passing of escalating material and labor costs onto end-consumers has further contributed to the ballooning size of the overall market.

Noteworthy Topics

Used Cars Market in Japan

Japan's used car market expanded in both transaction volume and pricing levels, reaching a total value of 4,830,800million yen. This growth was supported by a recovery in domestic new vehicle sales, which climbed to 4.566 million units*¹, surpassing the previous year's total for the first time in two years. Consequently, an increase in trade-ins generated a steady supply of retail-ready used vehicles, driving robust listing volumes across auto auctions (AA). (*¹Source: Japan Automobile Dealers Association [JADA], Japan Light Motor Vehicle and Motorcycle Association [Zenkeijikyo])

​In addition, dealerships' focus on vehicle circulation schemes—such as residual-value credit (balloon payment loans), personal auto leasing, and subscription services—and used car dealers' strategy in strengthening direct purchase from general consumer have grown circulation of retail-ready used vehicles considerably outside the auto auction ecosystem.

Meanwhile, demand for pre-owned vehicles has been rising as a relatively more accessible alternative amid soaring new car prices. Furthermore, export demand*² expanded further against the backdrop of the high global reputation for Japanese vehicle quality and the depreciation of the yen. (*² Source: Trade Statistics of Japan, Ministry of Finance) Amid intensifying competition to secure retail-ready used vehicles, appraisal values for direct vehicle acquisitions have risen, which has in turn been reflected in final retail prices.

Future Outlook

The automotive distribution landscape is undergoing a major transformation, driven by contracting domestic new vehicle sales, longer vehicle lifespans, and a projected medium- to long-term decline in overall vehicle ownership. To secure future growth, industry players are increasingly expanding into adjacent markets. Consequently, relying solely on one's core business is no longer sufficient to maintain a competitive edge. Long-term success now requires a holistic view of the entire automotive aftermarket, enabling companies to identify competitive dynamics and forge strategic partnerships.

Research Outline