Slight Increase in FY2024 Vehicle Registrations – A Sign That the "Used Car Shortage" Is Easing?

Japan's automotive market in fiscal year 2024 (April 2024 – March 2025) presented a complex picture. While new vehicle sales declined on a calendar year basis due to certification issues faced by some manufacturers and lingering supply constraints, the used car market—particularly for registered vehicles—saw the number of registrations exceed the previous year’s figures throughout the year. This increase in used vehicle registrations has led some to suggest that the recent severe “used car shortage” may be easing.

However, upon closer analysis, it is deemed premature to interpret this modest increase as a fundamental resolution of the shortage. Used car auction (AA) prices remain historically high, and the volume of used car distribution still falls far short of pre-pandemic levels. The primary factors behind the shortage—such as the reduced supply of trade-in vehicles due to delays in new car deliveries, robust overseas demand driving used car exports, and extended vehicle ownership periods—continue to impact the market, albeit to varying degrees.

The observed increase in used car registrations in FY2024 is better understood not as a result of improved supply, but rather as a reflection of heightened trading activity within a limited inventory. This was driven by factors such as a rise in off-lease vehicles and the return of consumers who had previously postponed purchasing.

The market remains in a transitional phase marked by structural changes compared to the pre-pandemic era, and a full resolution of the used car shortage, along with a return to market normalization, is expected to require more time.

FY2024 Japan Automotive Market: Trends in Vehicle Registrations and Notifications

To understand the trends in vehicle registrations and notifications in Japan's automotive market for fiscal year 2024, it is essential to first refer to official statistical data. For registered vehicles (such as standard and compact cars), the Japan Automobile Dealers Association (JADA) publishes statistics, while for mini vehicles (kei cars), data is released by the Japan Light Motor Vehicle and Motorcycle Association (ZENKEIJIKYO). It is especially important to note that JADA’s data on used car registrations is the sum of used vehicle new registrations, ownership transfer registrations, and user name change registrations.

Turning to new vehicle sales, the overall market appears to have remained in a challenging state. On a calendar year basis (January–December 2024), total domestic new vehicle sales—including registered vehicles and kei cars—fell 7.5% year-on-year to 4,421,494 units, marking the first decline in two years. This was largely due to the suspension of shipments caused by certification fraud issues at some manufacturers, in addition to lingering supply constraints such as semiconductor shortages.

However, trends on a fiscal year basis (April 2024 – March 2025) showed some variation. According to preliminary data from ZENKEIJIKYO, FY2024 new mini vehicle sales totaled 1,627,412 units, a slight increase of 0.1% from the previous year, essentially remaining flat. This contrasts with the decline seen on a calendar year basis and suggests that the mini vehicle market may have shown relative resilience in the latter half of the fiscal year, or that the impact of certification fraud was more strongly reflected in the calendar year data. Among popular models, the Honda N-BOX maintained its top position in both the mini vehicle and overall four-wheel vehicle categories in FY2024, with 210,768 units sold. However, this represented a slight decrease from the 218,478 units sold in the previous year.

Meanwhile, in the used vehicle market, there was a notable increase in the number of registrations and notifications during FY2024. According to data published by JADA, the number of used registered vehicle registrations (used new + transfers + name changes) increased compared to FY2023. While the specific figures must be verified with official sources (Used Car Registration Statistics FY2020–FY2024), an upward trend in annual totals has been confirmed. Monthly data within FY2024 showed fluctuations, with some months (e.g., April, May, July, and October) recording year-on-year increases, and others (e.g., June, August, November, and December) experiencing declines. Although this points to market instability, it also indicates that positive growth was achieved over the year as a whole. On a calendar year basis (2024), the number of used vehicle registrations and notifications reportedly exceeded the previous year’s level for the second consecutive year. However, for mini used vehicles, calendar year data for 2024 shows a slight year-on-year decline at 98.7%. Confirmed FY2024 data on used mini vehicles will need to be awaited from ZENKEIJIKYO.

Combining these trends in new and used vehicle markets, it is highly likely that the total number of vehicle registrations and notifications in Japan for FY2024 saw a modest increase compared to the previous year. This was driven by growth in the used car market—particularly in the registered vehicle segment—which helped offset stagnation (or slight decline) in the new car market. The differing dynamics of the new and used vehicle markets are apparent: while the recovery in new vehicle supply remains incomplete, trading activity in the used car market appears to have picked up due to certain factors.

The “Tama-Busoku” Phenomenon: Structural Shortage in Used Vehicle Supply

The term “tama-busoku” (literally “vehicle shortage”), frequently used in the used car industry, refers to a chronic shortage of used vehicles available for sale in the market. The word “tama” is a colloquial term for vehicles themselves. This is not merely a temporary lack of inventory, but rather a structural issue in the supply flow of vehicles into the used car market. The phenomenon has emerged and worsened due to a complex interplay of multiple factors.

The biggest factor has been the major disruption in new car supply, triggered primarily by the global semiconductor shortage. Factory shutdowns during the COVID-19 pandemic and the rapid increase in demand for electronic devices such as smartphones and PCs for remote work significantly tightened the supply of semiconductors—components essential to automobile production. Further compounding the issue were the fire at Renesas Electronics’ Naka plant (a major semiconductor manufacturer), delays in the supply of other parts and materials such as wire harnesses, paint, and plastics, and broader logistics disruptions. As new car production stalled and delivery lead times extended significantly (exceeding a year in some cases), the number of trade-in vehicles flowing into the used car market declined. This reduction in trade-ins narrowed a key pipeline of used vehicle supply, becoming a direct cause of the tama-busoku.

On the supply side, while inflow decreased, demand for used vehicles actually increased. Amid the pandemic, many people avoided public transportation and sought personal mobility solutions, boosting car demand. Additionally, due to long lead times for new cars, more consumers opted for used vehicles that could be obtained quickly. Economic uncertainty may have also driven some to choose used cars as a more affordable option.

Strong overseas demand further accelerated the domestic shortage. Japanese used vehicles, known for their high quality and well-maintained condition, remain in high demand abroad. Interest has been particularly strong from markets such as Russia, the United Arab Emirates (UAE), New Zealand, and several African nations. The United States’ “25-year rule,” which relaxes import restrictions for vehicles over 25 years old, has also increased demand for certain older model sports cars. A weak yen has supported exports, leading to further outflow of vehicles that might otherwise have circulated domestically. Although temporary factors such as rising transport costs and container shortages have occasionally slowed exports, on the whole, export activity has continued to exacerbate the domestic tama-busoku.

Changes in consumer behavior have also played a role. Even before the shortage became apparent, the average vehicle ownership period in Japan was already lengthening. As new car deliveries were delayed, more consumers chose to extend their current vehicle ownership rather than switch, further stalling supply to the used car market.

As supply decreased and demand increased, the supply-demand balance collapsed significantly. The used car market—particularly auto auctions (AA), which serve as a trading venue for businesses—became extremely tight. Intense bidding wars erupted among retail and export dealers for the limited inventory (tama), driving AA closing prices to historic highs. This price surge at AA translated directly to higher used car retail prices, creating a double burden for retailers: difficulty in securing inventory and pressure on profit margins. The AA market, in this sense, acted as a price amplifier for the underlying physical shortage.

Thus, “tama-busoku” is not the result of a single cause, but rather a phenomenon that emerged and intensified due to a combination of factors: bottlenecks in new car supply, changes in demand structure, a booming export market, and evolving consumer ownership behavior. Understanding this multi-factorial nature is essential for assessing signs of recovery and forming outlooks for the future.

Assessing the Recovery: Were There Signs of Easing the “Tama-Busoku” (Used Car Shortage) in FY2024?

To evaluate whether the severe “tama-busoku” (shortage of used car inventory) eased throughout FY2024, it is necessary to examine inventory levels, price trends, and market participants’ perceptions from multiple perspectives.

Regarding inventory levels, the situation remained constrained. Although used car dealers attempted to meet customer demand by utilizing shared inventory platforms, the fundamental issue of physical inventory shortages had not been resolved. Some reported a decline in the fulfillment rate at display lots. As stated in Section I, the increase in used vehicle registration numbers may suggest a potential rise in inventory, but the overall level remains significantly lower than pre-COVID levels (used car registrations and notifications in 2017–2019 were just under 7 million units annually), making it difficult to consider this a full recovery. In fact, the number of bankruptcies among used car dealerships increased to 98 cases in FY2024, 1.4 times more than the previous year, indicating that difficulties in securing inventory and rising procurement costs likely placed pressure on business operations.

Looking at price trends, the market exhibited complex movements. Auto auction (AA) prices remained historically high. The average winning bid per auction session at USS, the largest AA operator, consistently exceeded the previous year’s levels throughout FY2024. The annual average reached a record high of 1.206 million yen, up 14.3% from the previous year. However, signs of a peak emerged in the latter half of the fiscal year. After reaching a peak of 1.256 million yen in July 2024, USS’s monthly average dropped below 1.2 million yen in November for the first time in seven months, with November and December figures hovering in the 1.1 million yen range. The used car market price index developed by Aucnet also declined month-over-month in November 2024. Nonetheless, these decreases were merely adjustments from peak levels, and the overall price level remained exceptionally high by historical standards.

Retail prices and trends across segments also merit attention. In the second half of 2024, some overheating models, such as the Toyota Alphard and Vellfire, reportedly experienced price declines. There were also reports of price drops for certain electric vehicles (EVs), including the Mitsubishi eK X EV. Additionally, AA prices for kei cars reportedly declined in autumn 2024. However, these movements were limited in scope, and it was emphasized that “not all categories are experiencing falling prices.” The general consensus was that used car prices remained at high levels overall.

Reports and analyses regarding market normalization pointed to some positive developments, such as the easing of the semiconductor shortage and the upward trend in new car registrations contributing to increased used vehicle supply. However, concerns remained regarding the “2024 logistics issue,” which could impact vehicle transportation, as well as persistently high overseas demand for Japanese used cars and ongoing export pressure—factors that continued to hinder recovery.

Taking these factors into account, the signs of easing in the “tama-busoku” observed in FY2024 can be characterized as inconsistent and limited. While price corrections occurred in certain overheated segments and vehicle models, it is difficult to conclude that overall inventory or price levels had returned to normal. Although AA prices softened slightly from their peak, they remained high, indicating ongoing tight supply-demand conditions in the wholesale market. As AA price trends may precede movements in the retail market, the price softening observed in the latter half of the fiscal year could suggest a future easing of the shortage. However, within FY2024 itself, it cannot be assessed that a broad-based recovery had been achieved.

Analysis of Factors Behind the Increase in Registrations and Notifications in FY2024

Several factors are believed to have contributed to the increase in used vehicle registrations in FY2024. In particular, the fact that used car transactions increased despite the new car market not performing strongly may indicate a structural shift in the market.

First, the relationship with new car sales is not straightforward. As mentioned earlier, sluggish new car sales suppressed the generation of trade-in vehicles, thereby narrowing one of the main sources of supply for the used car market. However, toward the latter half of FY2024, production and supply of certain new models may have begun to improve, potentially prompting delayed replacement purchases and, albeit limited, generating trade-in vehicles. Still, given that the total volume of new car sales has not returned to pre-COVID levels, it is difficult to attribute the increase in used vehicle registrations solely to an uptick in trade-ins from new car sales.

Next, changes in trade-in patterns and ownership cycles should be considered. Users who postponed purchasing a new vehicle during the peak of the pandemic and semiconductor shortages may have finally released their vehicles into the market as conditions (partially) improved. In addition, the average vehicle ownership period has been increasing, raising the average vehicle age in the overall market. As a result, although the frequency of replacements may be declining, when replacements do occur, they may involve the release of older vehicles, potentially increasing the volume of used cars entering the market per transaction.

The influx of off-lease and fleet vehicles may also be an important factor. In recent years, the auto leasing market—including leases to individual consumers—has been on the rise. Vehicles returned at the end of lease terms (off-lease vehicles) tend to be relatively new and have clear maintenance records, making them a stable source of supply in the used car market. Demand for corporate vehicle leases is also on a recovery trend, and such vehicles may have flowed into the used market, contributing to the rise in registrations.

Furthermore, it is possible that increased churn within the used car market itself played a role. In other words, rather than an increase in newly supplied vehicles, the higher registration numbers may reflect more frequent transactions involving existing inventory. This could be due to used car dealers strengthening their efforts to purchase vehicles directly from consumers or engaging more actively in inter-dealer inventory sharing (such as shared inventory systems) in response to the difficulty of sourcing from AA (auto auctions).

Economic factors may also have contributed, with rising prices and increased new car costs prompting consumers to opt for more affordable used vehicles. Additionally, the partial recovery of the export market in the latter half of the fiscal year may have stimulated related domestic vehicle procurement and registration activity.

Taken together, the increase in used vehicle registrations in FY2024 is more likely the result of diversified and evolving supply sources (such as off-lease vehicles and delayed trade-ins of slightly older cars), as well as intensified transaction activity within limited supply, rather than a recovery in direct trade-in supply from new car sales. In other words, the increase in registrations does not necessarily indicate a significant rise in the absolute volume of “tama” (vehicles) in the market or a fundamental improvement in the supply-demand balance. Rather, it can be interpreted as a result of market participants working to circulate available vehicles as much as possible under ongoing supply constraints. This indicates an increase in trading activity, but is not synonymous with a resolution of the supply shortage.

Historical Comparison: Against Pre–“Tama-Busoku” Conditions (Before 2020)

To accurately assess the state of the market in FY2024, it is essential to compare it with the conditions prior to the onset of the “tama-busoku” (used vehicle shortage), particularly by using the pre-pandemic year of 2019 (calendar or fiscal year) as a benchmark.

The market scale before the COVID-19 pandemic was significantly different from that of FY2024. New vehicle sales in the 2019 calendar year (January–December) totaled approximately 5.2 million units (around 3.28 million registered vehicles and approximately 1.91 million kei cars). For FY2019 (April 2019 – March 2020), total new vehicle sales were reported at around 5.04 million units. Meanwhile, the used vehicle market was even larger in scale. Between 2017 and 2019, the annual number of used vehicle registrations and notifications remained just under 7 million units. In the 2019 calendar year, used vehicle registrations for registered vehicles alone (used new registrations + ownership transfers + name changes) totaled about 3.84 million units. Used kei car sales (used new + name changes) also exceeded 3 million units annually.

When compared with FY2024, the gap becomes clear. As discussed in Section I, new car sales for the 2024 calendar year were approximately 4.42 million units—markedly lower than the 5.2 million units in the 2019 calendar year. While used vehicle registrations and notifications increased year-on-year in 2024, they still fell significantly short of the pre-pandemic level of nearly 7 million units annually. Although used vehicle registrations for registered vehicles increased year-on-year in FY2024, it is unlikely that the absolute figure reached the level of FY2019.

Price levels also differed significantly. The average winning bid at USS auctions in FY2024 reached a record-high 1.206 million yen, whereas pre-pandemic AA prices were substantially lower, as implied by the characterization of recent prices as “historically high.”

This comparison reveals that the market turmoil that began in early 2020 was not merely a short-term fluctuation but a prolonged and serious disruption in supply, accompanied by soaring prices. In 2020, due to the pandemic, new car sales dropped by 11.5% year-on-year to approximately 4.6 million units, and used vehicle registrations also declined. New car sales in FY2020 (April 2020 – March 2021) also fell 7.6% year-on-year to approximately 4.66 million units, marking the first time in five years that sales dipped below 5 million units.

Thus, the year-on-year increase in used vehicle registrations observed in FY2024 represents only part of a recovery from previously depressed levels and does not indicate a return to pre-pandemic market normalcy. Both supply volumes and price levels still exhibit significant gaps.

Furthermore, this prolonged period of disruption may have brought about structural changes in the market itself. The rise in the number of license surrenders due to Japan’s aging population, a declining interest in car ownership among urban youth, the spread of car sharing, the shift toward electrification, and the potentially entrenched high export ratio could all contribute to a future baseline for domestic used vehicle circulation that is lower than pre-pandemic levels. In this sense, comparisons with 2019 not only indicate the degree of recovery but also suggest the possibility that the market has undergone qualitative change.

Future Outlook: Forecast for Used Car Supply Beyond FY2024

Looking ahead beyond FY2024, the outlook for Japan’s used car market—particularly in terms of supply (the securing of “tama” or inventory)—remains highly uncertain due to the interplay of multiple factors.

In the short term (2025), expert opinions are divided; however, the general consensus leans toward continued high prices with a gradual move toward stabilization. Used car prices are expected to remain at elevated levels through 2025. Some have pointed out the possibility of the market settling from the latter half of 2024 into 2025, with hopes that improvements in new vehicle supply will lead to increased used car circulation. There are also predictions that the overall market size will follow a growth trajectory—IMARC Group forecasts a CAGR of 6.38% from 2025 to 2033, while SDKI projects a CAGR of 9.2% from 2025 to 2037. Nevertheless, many believe that sharp market fluctuations like those seen from 2023 to 2024 are unlikely to recur.

The following are key factors that will determine future supply conditions:

• Normalization of New Vehicle Production and Supply:
  Further resolution of the semiconductor shortage and stable supply will be critical to the recovery of the used car market. If the entire supply chain stabilizes, new car delivery times will shorten, and the volume of trade-in vehicles will increase. In particular, the resumption of new order intake by Toyota could lead to increased market supply.
• Export Trends:
  As long as the weak yen persists, overseas demand for Japanese used cars is expected to remain strong, maintaining pressure on domestic supply. Exports to Russia reportedly continue via third countries despite sanctions, and demand for vehicles eligible under the U.S. “25-Year Rule” remains robust. Exchange rate fluctuations directly affect export volumes and must be closely monitored.
• Economic Conditions:
  Trends in the domestic economy, inflation, and interest rates will influence consumer purchasing power and preferences between new and used vehicles.
• Electrification (EVs/HEVs):
  As electric vehicles (EVs) and hybrid electric vehicles (HEVs) become more widespread, the composition of the used car market will also shift. In particular, EVs face uncertainties in resale value due to concerns over battery degradation and insufficient charging infrastructure, which could impact supply and price formation in the market. HEVs continue to be popular, with stable demand expected in the used market as well.
• Logistics Challenges:
  Disruptions in maritime shipping (e.g., through the Suez and Panama Canals) may raise export costs, while domestic delays and increased costs due to the shortage of truck drivers (the so-called “2024 problem”) could restrict the distribution of used vehicles both domestically and abroad.
• Industry Restructuring:
  Corporate strategies and restructurings—such as the potential merger talks among Nissan, Honda, and Mitsubishi—could have long-term implications for both the new and used car markets.

While some experts forecast continued growth for the used car market, dealers are being urged to implement adaptive strategies. These include developing alternative procurement channels beyond auctions (such as strengthening ties with leasing companies or direct purchases from individuals), promoting digital transformation (DX) to improve operational efficiency, and enhancing staff training.

From a long-term perspective, structural factors such as Japan’s demographic shifts (population aging, increase in license surrenders) and the shift in urban areas away from car ownership (including the spread of car-sharing), as well as the transition to electrification and potentially entrenched high export ratios, may lead to a gradual decline in the domestic vehicle ownership base and used car circulation volume. S&P Global Mobility forecasts that by 2030, domestic light vehicle sales will decline to 4.3 million units. This represents a factor that could impact future market size independent of the “tama-busoku” issue.

Ultimately, the future supply situation will be determined by the tug-of-war between supply-boosting factors—such as recovery in new car production—and supply-constraining factors—such as persistent export demand and structural changes in domestic demand. The volume of “tama” available domestically will vary greatly depending on which force prevails. Moreover, rather than a uniform recovery, the market is likely to become more segmented, with prices and supply conditions differing by model, year, fuel type, and export popularity. For instance, vehicle models in high demand for export or certain vintage cars may retain high prices, while models primarily driven by domestic demand, including EVs, may show different price trends.

Given the volatility and complexity of the market, it will be essential to analyze future developments using both macro and micro perspectives.

Assessment: Is the Modest Increase in Registrations and Notifications a Genuine Sign of Easing the “Tama-Busoku”?

In Japan’s automotive market for FY2024, it has been confirmed that used vehicle registrations increased year-on-year. However, whether this “modest increase” constitutes a reliable harbinger of a true resolution to the long-standing issue of the “tama-busoku” (used vehicle shortage) requires careful evaluation.

Based on the cumulative analysis so far, the following points have become clear:

• The number of used vehicle registrations in FY2024 (particularly registered vehicles) increased compared to the previous year.
• However, the absolute figures remain far below pre-pandemic levels (around 2019).
• The average winning bid at used car auctions, while softening slightly from its peak, still remains at historically high levels.
• The fundamental causes of the shortage—such as the delayed full recovery of new vehicle supply, strong export demand, and structural factors—have largely not been resolved.
• The increase in used vehicle registrations is likely a reflection of changes in supply sources (e.g., off-lease vehicles) and heightened transaction activity within limited supply, rather than a genuine increase in available inventory.

Taking these factors into account, it is reasonable to conclude that the modest increase in registration figures in FY2024 does not indicate a “resolution” of the shortage, but rather reflects an “intensification of market activity” under constrained supply conditions. While the year-on-year increase is a positive development, it is more accurately understood as a rebound from a sharp downturn or a result of market participants adapting (e.g., utilizing alternative supply sources), rather than as evidence that the supply-demand balance has normalized.

To determine a true “recovery” or “resolution of the tama-busoku,” it is not enough to look at year-on-year growth alone; comparison with historical levels is essential. Only when inventory levels become ample, prices return to stable levels that reflect appropriate depreciation, and transactions proceed without excessive supply-demand tensions, can the shortage be considered resolved. Clearly, the conditions in FY2024 do not meet this definition.

Therefore, in response to the headline “FY2024 Registrations and Notifications Show Modest Increase—A Sign of Easing the ‘Tama-Busoku’?”, it should be assessed that while the “modest increase” is a fact, it is premature to interpret this as a “sign of resolution,” and such a claim requires significant reservations. The market continues to operate under dynamics that differ from the pre-pandemic era, and trends in export demand and domestic structural changes will continue to significantly affect the pace and extent of supply recovery. Moreover, the relationship between the new and used vehicle markets has grown more complex than the traditional trade-in model, and recovery in one does not necessarily guarantee an immediate or proportional recovery in the other.

Conclusion

The modest increase in vehicle registrations and notifications in Japan’s automotive market for FY2024 was primarily driven by a year-on-year rise in used vehicle registrations. However, this trend alone is not sufficient to conclude that the serious issue of the “tama-busoku” (used vehicle shortage) in recent years is on the path to resolution.

Used car auction prices remain at historically high levels, and the overall volume of used vehicle distribution has yet to return to pre-pandemic levels. The fundamental cause of the shortage—constraints in new vehicle supply—has not been fully resolved, and strong export demand continues to absorb a significant portion of domestic supply.

The increase in used vehicle registrations observed in FY2024 should be interpreted not as a result of easing supply shortages, but rather as the outcome of intensified trading activity within a limited supply context—such as an increase in off-lease vehicles and the materialization of previously delayed replacement demand. While this indicates that the market is functioning, it does not signify that the supply-demand balance has normalized.

Looking ahead, the market will likely continue to face high levels of uncertainty, influenced by various factors including the pace of recovery in new vehicle supply, export conditions (including currency fluctuations), the domestic economic environment, and the progress of vehicle electrification. Structural changes—such as extended vehicle ownership periods, demographic shifts, and the transition away from private car ownership—must also be considered, as they may redefine the baseline of used vehicle circulation in Japan.

Therefore, the modest increase in registrations and notifications in FY2024 cannot be regarded as a “definitive sign” of the resolution of the tama-busoku, and the market is still in the process of normalization. Stakeholders must continue to closely monitor market trends and pursue flexible strategies to adapt to ongoing changes.