Domestic vehicle production in May plunged 41.4 percent from a year earlier to 542,282 units, the sharpest fall for the month and the eighth straight monthly drop, an industry body said Monday.
But the rate of decline shrank for the third consecutive month as automakers' inventory cutbacks have made progress, the Japan Automobile Manufacturers Association said.
Despite the progress, however, the overall May output "is still not a strong figure and entrapped in low territory," an association official said.
Exports plummeted 55.9 percent to 233,217 units, the association said.
The numbers mirror the anemic global auto market, and the sluggishness is likely to continue for the time being, the official said.
By type, passenger car production dived 40.7 percent to 470,038 units, truck output plunged 45.0 percent to 67,180 units and buses plummeted 50.2 percent to 5,064 units.
"It appears that these numbers do not reflect the effects" of tax breaks and other incentives the government has been offering to get people to buy environmentally friendly cars, the official said.