How Japan's New Vehicle Inspection and Emissions Regulations Could Transform the Used Car Market (2025 Analysis)

I. Overview

This report analyzes the potential impact of revisions to Japan’s vehicle inspection and registration system (hereinafter referred to as the "Shaken system") and the strengthening of emission regulations on the used car market. In particular, it focuses on the possibility that some vehicles may be released into the market in large volumes due to these regulatory changes. The report examines the resulting effects on the supply volume, price fluctuations, and environmental impact within the used car market. Drawing on past examples of regulatory changes and expert opinions, it aims to forecast market trends from a multifaceted perspective.

Characteristics of Vehicles Likely to Be Released into the Market

Older Diesel Vehicles (Pre-2009)

Reason: High NOx and PM emissions make it difficult for these vehicles to meet the new standards.

Non-OBD Compliant Vehicles (Manufactured between ~1996–2010)

Reason: With the implementation of mandatory OBD diagnostics, the risk of failing inspections increases.

Other Categories

Vehicles Unsuitable for Low-Beam Headlight Inspection
Reason: Due to the change in inspection methods starting August 2024, these vehicles may fail.
Characteristics:

• Vehicles with HID or halogen headlights that lack adjustable beam angles
• Headlights made of polycarbonate with yellowing or cloudiness (common in vehicles over 10 years old)

Motorcycles and Kei Cars with Two-Stroke Engines or Carburetors

Reason: Difficulty in meeting new emission standards.

Newer Vehicles with Deteriorated Emission Control Components

Reason: Lack of maintenance can trigger OBD errors.
Characteristics:

• Used vehicles with unknown maintenance history regarding emission sensors or catalytic converters
• Vehicles equipped with DPF (Diesel Particulate Filter), which may cause issues if poorly maintained

Overview of Japan’s Current Vehicle Inspection System

Basic Structure and Purpose

Japan’s vehicle inspection system, known as the Shaken (vehicle inspection and registration system), is a periodic inspection mandated by the Road Transport Vehicle Act. It can be likened to a "regular medical check-up" for cars. For private passenger vehicles, inspections are required three years after initial registration, and every two years thereafter. The system serves three primary purposes.

First, the inspections ensure that a vehicle’s safety and environmental performance meet government standards. According to materials from Kobac Co., Ltd., specific safety-related criteria include tire tread depth of less than 1.6 mm, and cracks in the windshield caused by flying debris. A column by CM Group also explains that Shaken inspections check for vehicle safety and environmental impact, verifying compliance with safety standards necessary for road use.

Second, the system functions as a mechanism for collecting the automobile weight tax and compulsory automobile liability insurance (CALI) fees. An article in World Jet Sports Magazine notes that one reason Japan’s Shaken is considered expensive is because payment of these fees is mandatory during the inspection.

Third, by consolidating these procedures into the Shaken system, it provides clear and immediate proof that a vehicle is "legally roadworthy." Article 4 of the Road Transport Vehicle Act stipulates that vehicles without a valid inspection may not be driven on public roads, and operating a vehicle with an expired inspection is a legal violation.

Thus, the Shaken system is not only for checking safety and environmental compliance, but also serves fiscal functions such as tax and insurance fee collection. If stricter standards are introduced, leading to higher repair costs, the financial burden of maintaining a vehicle may increase significantly, potentially prompting owners to consider disposing of their vehicles.

Historical Background and Evolution

Japan’s current Shaken system was implemented in 1951. According to a column by Hayataro Co., Ltd., the system was designed to manage vehicles by combining inspections for safety, registration procedures, and maintenance requirements. However, the origins of vehicle inspections trace back to 1903. Initially, the focus was more on business management, but over time, the emphasis shifted toward inspection, maintenance, and registration of vehicles.

According to a column by Carlink, Japan’s vehicle inspections began in 1930, targeting commercial vehicles such as buses and taxis to ensure safety. Private vehicles were not included at that time. As car ownership increased after World War II, inspections became mandatory for private vehicles in 1951. In 1955, with a rise in traffic accidents, compulsory CALI was introduced to provide relief to accident victims, and in 1973, inspections for light vehicles (kei cars) also became mandatory.

In line with the widespread adoption of cars, advancements in vehicle performance and quality, and the development of road networks, the 1955 revision of the law reduced the number of inspection points from 102 to 60.

Thus, Japan’s Shaken system has evolved in response to societal changes and advances in automotive technology. From its origins in business management to a focus on safety and now environmental performance, the system has transformed to meet the demands of each era. The current discussions around revisions and regulatory tightening can be seen as part of this ongoing evolution.

Recent Discussions and Trends Regarding System Revisions

In recent years, discussions regarding the Shaken system have centered around earlier access to inspection procedures and the introduction of OBD (On-Board Diagnostics) testing. From April 2025, the period during which a vehicle can undergo inspection will be extended from one month before expiration to two months prior. This aims to alleviate the concentration of inspections at the fiscal year-end and support work-style reform for auto mechanics. According to news from Kobe Car Center Co., Ltd., this change is expected to help mechanics manage workloads more evenly and allow users to schedule appointments more easily.

Similarly, CALI can now also be renewed up to two months in advance.

Furthermore, from October 2024, OBD testing will be fully implemented for new domestic vehicles, and from October 2025, for new imported vehicles. OBD testing uses onboard diagnostic systems to electronically check emission levels, engine conditions, and other vehicle functions. According to an article by SmartDrive, OBD testing identifies vehicle malfunctions through error codes and verifies that safety support systems comply with safety standards.

These revisions aim to create a more efficient and safer inspection system. However, the introduction of OBD testing may uncover previously undetected vehicle issues, which could effectively tighten inspection standards.

Japan’s Latest Emission Regulations

Details and Scope of Strengthened Regulations

Japan has long been tightening its vehicle emission regulations to prevent air pollution caused by automobile exhaust gases. According to the Japan Muffler Association (JMCA), the most recent revisions have reinforced the emission limits for carbon monoxide (CO), total hydrocarbons (THC), non-methane hydrocarbons (NMHC), nitrogen oxides (NOx), and particulate matter (PM) during test mode driving.

Particularly for motorcycles, the average regulatory limits for hydrocarbons (HC) and carbon monoxide (CO) have been reduced by approximately 75% to 85% compared to previous standards, and nitrogen oxides (NOx) have been reduced by around 50%, demonstrating a significant tightening of the regulations. Furthermore, stricter limits have been applied to emissions during idling and to fuel evaporative gases while parked.

According to a commentary by Sustech Corporation, Europe is preparing to implement even stricter Euro 7 emission standards. These new standards not only impose tougher limits on NOx and CO but also target ultrafine particulate matter (PM), and even include brake dust and tire wear particles as regulated pollutants. While Japan has not yet fully adopted Euro 7 standards, considering international trends, it is plausible that Japan’s emission regulations will continue to move in a similar direction in the future.

Enforcement Timeline and Target Vehicle Types

According to press releases by Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT), the implementation of automobile emission regulations is being phased in, with different start dates depending on whether the vehicle is a new model or a continuing production model. For example, new regulations came into effect for new models in December 2020, and for continuing production models in November 2022.

Based on information from the JMCA, the 2016 (Heisei 28) regulations mainly target gasoline-powered motorcycles. According to the website of Nagoya City, the vehicle types subject to these regulations include diesel vehicles (passenger cars, trucks, buses, and special vehicles) as well as gasoline and LPG vehicles (trucks, buses, and special vehicles—excluding kei cars). Additionally, the Truck Five website notes that the regulated diesel vehicles include standard trucks, small trucks, large buses, microbuses, special vehicles based on trucks, buses, and diesel passenger cars, as well as diesel passenger cars with fewer than 11 seats.

From these sources, it is clear that Japan’s latest emission regulations cover a wide range of vehicles, including gasoline, diesel, and LPG-powered vehicles. The regulations particularly tend to target vehicle types with high environmental impact or larger vehicles with greater emissions output.

Vehicle Models and Production Years Potentially Affected by Stricter Emission Standards

When emission regulations are tightened, vehicles manufactured under older standards are more likely to fail to meet the new criteria. By comparing the details of the latest regulatory enhancements with the historical evolution of emission standards, it becomes possible to estimate which vehicle models and production years may be affected.

For example, in the case of motorcycles, models predating the 2016 (Heisei 28) standards—particularly those with carburetor systems or two-stroke engines—are considered unlikely to comply with the new regulations. Regarding four-wheeled vehicles, diesel cars produced before the 2010 (Heisei 22) “post-new long-term” regulations may emit higher levels of NOx and PM, potentially resulting in driving restrictions within regulated zones. According to FLEX Corporation’s website, older diesel-powered models of the Toyota Land Cruiser and Land Cruiser Prado (such as the 40, 60, 70, 80, 100 series, and the 70, 90, and 120 series Prado) may fall into this category.

Even for gasoline-powered vehicles, especially those produced before the 1990s, it may be difficult to meet the new emission standards due to inferior emission control technologies such as catalytic converters. Furthermore, even relatively newer vehicles may fail inspections if they have not been properly maintained or if their emission control components have deteriorated.

Impact of Vehicle Inspection System Revisions and Emission Regulations on Continued Use of Existing Vehicles

Additional Inspection Items and Stricter Criteria

The revision of the vehicle inspection system and strengthening of emission regulations may significantly affect the continued use of existing vehicles. The introduction of OBD (On-Board Diagnostics) testing, for example, increases the likelihood of detecting malfunctions in electronic control systems—issues that would not have been caught through visual checks or simple measurements alone. This includes faults in emission control systems, engine management, and brake systems, effectively tightening the vehicle inspection pass criteria.

According to the Ministry of Land, Infrastructure, Transport and Tourism (MLIT), the OBD inspection targets advanced driver-assistance systems and emission reduction devices, and if a malfunction is detected, repairs will be mandatory in order to pass the inspection.

Additionally, from August 2024, headlight inspections will be conducted using only low beams for vehicles manufactured on or after September 1, 1998. Previously, high beams were allowed if low-beam testing was difficult, but going forward, compliance with low-beam standards will be required. This change may particularly impact older vehicles or those with deteriorated headlights, making it more difficult for them to pass inspection.

Mandatory Repairs and Possible Use Restrictions

Stricter inspection standards may result in a higher number of vehicles failing to pass. In such cases, repairs will be required to meet inspection criteria. Especially when OBD tests detect electronic control system failures or deterioration of emission control devices, the repair costs can be substantial.

Furthermore, in some regions, vehicles that fail to meet emission standards may face usage restrictions. For example, under the Automobile NOx/PM Law, diesel vehicles that do not meet emission criteria may be banned from operating in designated areas or may be unable to pass inspection. These regulations are primarily enforced in urban areas with serious air pollution problems, and affected vehicle owners may be forced to stop using their vehicles.

Possibility of Vehicle Owners Selling or Scrapping Non-Compliant Vehicles

Owners of vehicles that can no longer pass inspection due to regulatory tightening—or that require costly repairs—are likely to consider selling or scrapping their vehicles for economic reasons. This is especially true for older vehicles, where repair costs may exceed the vehicle's market value. Additionally, vehicle-related taxes such as the automobile tax and weight tax increase for vehicles that have aged beyond a certain period, adding to the overall maintenance burden and making selling or scrapping a more attractive option.

When selling to a used car dealer, vehicles that do not meet emission standards typically receive lower appraisals. In particular, diesel vehicles that are difficult to resell domestically may be declined or purchased at very low prices. However, dealers with export channels may still purchase older vehicles or those with high mileage.

In cases where scrapping is chosen, there are usually costs involved in the procedure. However, by using vehicle scrapping services, owners may be able to have the vehicle collected free of charge or even receive a purchase price depending on the model. In light of stricter environmental regulations, disposing of older non-compliant vehicles and switching to newer, more environmentally friendly models may be a practical and responsible option.

Analysis of the Impact on Vehicle Supply, Price Fluctuations, and the Environment in the Used Car Market

Potential Increase in Vehicle Supply in the Used Car Market

With the revision of the vehicle inspection system and the strengthening of emission regulations, many vehicle owners may choose to sell or scrap their vehicles if they no longer meet the new standards. As a result, the supply of vehicles in the used car market is likely to increase. In particular, an influx of vehicles—especially those models and production years affected by the stricter regulations—is expected. According to an analysis by You-CarPack Co., Ltd., used car prices fluctuate based on various factors, and regulatory tightening can be a major factor in increasing supply.

Forecast of Price Fluctuations in the Used Car Market

An increase in supply within the used car market may cause price fluctuations. Older vehicles that no longer comply with regulations, or those requiring costly repairs, may become oversupplied, leading to a decline in their prices. Conversely, relatively newer used cars that meet the updated regulatory standards or have high fuel efficiency may see rising demand, resulting in price increases. A report by Nextage Co., Ltd. explains that used car prices are influenced by factors such as supply and demand, model popularity, and vehicle condition.

Environmental Impact

The removal of high-emission older vehicles from the market due to regulatory tightening is expected to have a positive effect on Japan’s domestic environment. However, attention must also be paid to the possibility that these vehicles may be exported to overseas used car markets rather than scrapped. According to an analysis by AutoHub Co., Ltd., exporting vehicles to countries with looser environmental regulations may not contribute to a net reduction in global environmental impact. Moreover, a surge in vehicle scrappage could place additional stress on the automobile recycling system.

Past Cases of Similar Regulatory Changes in Japan

Japan has implemented strengthened emission regulations in the past, and these have had noticeable impacts on the market. According to the Ministry of Land, Infrastructure, Transport and Tourism (MLIT), the 2003 implementation of the Automobile NOx/PM Law and metropolitan diesel vehicle regulations led to a sharp increase in new truck registrations in the Kanto region, the area targeted by the regulations. This was likely due to a spike in replacement demand as older, non-compliant vehicles were taken off the roads.

This precedent suggests that the current regulatory tightening could also encourage replacement, particularly for vehicles subject to the new restrictions, thus driving demand for new or newer used vehicles. However, within the scope of this study, detailed data on the specific impacts of past regulatory changes on the supply and pricing of used cars could not be confirmed. Nonetheless, it is reasonable to assume that new regulations affecting the new car market will also indirectly influence used car market trends.

Opinions from Automotive Experts, Industry Groups, and Media Reports

Automotive experts and industry organizations have expressed various views on the current revisions to the vehicle inspection system and the tightening of emission regulations. According to the Ratchet Monkey blog, emission regulation changes will affect exhaust inspections during vehicle inspections, and special attention is required for vehicles undergoing user inspections. The Mobility Town blog lists key changes in the new inspection system, such as stricter environmental standards, revised safety standards, and digitalization of inspection procedures.

MLIT also reports that review panels involving automotive industry associations are being held to discuss the revision of vehicle inspection and maintenance systems.

Media reports have highlighted concerns that the introduction of OBD testing from October 2024 could make it more difficult for vehicles to pass inspection. These perspectives suggest that regulatory tightening may increase both vehicle maintenance costs and the difficulty of passing inspections—factors that are expected to impact the used car market.

Conclusion

Based on the findings of this report, the revision of the vehicle inspection system and the strengthening of emission regulations in Japan are likely to have a significant impact on the used car market. In particular, for certain models and production years that may no longer meet the new emission standards, an increase in supply to the used car market is highly probable. As a result, prices for such vehicles may decline, while demand and prices for newer used cars that meet the latest standards may rise.

From an environmental standpoint, replacing older, high-emission vehicles with cleaner alternatives is expected to be beneficial. However, careful monitoring of export market trends and the domestic vehicle scrappage system will also be necessary.

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