Why Are Japanese Cars So Small?

If you’ve been to Japan, then you’ll surely have seen the vast number of tiny cars that cover the road:

While these are a specific class/type of car in many cases (“Kei” car, which we will explain further in this article) even normal Japanese cars like Toyota Corollas or Honda Civics are generally smaller and more compact than their American rivals and class equivalents.

But why are Japanese cars so small relative to cars from other countries, especially America?

In this edition of Car Facts we take a look at a few reasons why Japanese cars tend to be more on the petite side.

Tax Incentives Favor Smaller Cars

The biggest reason that cars are often smaller in Japan is because tax incentives basically make it more appealing and affordable to own a small car.

In Japan, roughly 30% of the domestic car market consists of Kei cars (ultra mini cars).

Kei cars are popular because they cost less to tax and less to insure. Because they are often mechanically simple, they don’t tend to be particularly expensive to run either, and offer excellent fuel economy.

One of the editors of this website had a Honda N-Box Kei car while living in Japan:

There are even Kei car versions of pickup trucks and vans, such as the legendary Suzuki Super Carry van/pickup truck (which may be familiar to some as the appropriately named Bedford Rascal):

There are even Kei sports cars, such as the legendary Mazda AZ-1 Autozam, as driven by none other than noted car enthusiast Jay Leno:

We are currently working on an article that goes into more detail about Kei cars and their role in Japanese automotive culture, but for now suffice it to say that because you pay more tax, insurance and compliance costs for larger, heavier cars, Japanese car buyers are incentivised to make smaller cars (and – in turn – car manufacturers are driven to produce relatively smaller vehicles).

Congestion & Limited Parking Means Space Is At A Premium

Another reason why small arms – especially Kei cars – are so popular in Japan is because space is at a premium, particularly in urban areas. Consider greater Tokyo, where over 37 million people reside; that is an enormous number of people, so sprawl in terms of large cars and accommodatingly large car parks etc is not going to work.

There simply is not the room for everyone who wants to drive to be able to have a full-sized car.

This is similar to the reason why many European drivers prefer city cars. For example, while big SUVs like the VW Touareg might be popular with American/Australian/New Zealand buyers of European cars, the more popular cars in European cities tend to be smaller vehicles like the VW UP or VW Polo.

Due to population density and space constraints, Japan has learned to do more with smaller cars.

Japanese Culture Is Not So Car-Centric

Another overlooked reason for Japanese cars being smaller is that Japanese society/culture is not as ‘car-centric’ as you find in Western countries, particularly the United States.

Many people get by fine using public transport and alternative transport options like bikes or walking. For a great deal of Japanese people, a car is more of a luxury and something that is only used occasionally – which means you either buy something fancy/premium, or you get a small, basic car that is cheap to purchase and maintain that ‘does what it needs to’ and nothing more.

Although there are many car sub-cultures in Japan (and Japanese car manufacturers have made some of the greatest cars in the world, including legends like the Toyota Supra and Nissan Skyline GT-R) it is fair to say that on the whole, cars are less integral to Japanese society than they are in America, for example.

Because the car has a smaller role to play in daily life, it doesn’t need to be as large, or as spacious, or have so many features. It is more of an appliance for getting from A to B in the most cost effective manner possible.

Conclusion – Why Are Japanese Cars So Small?

As you can see, there are a few key reasons why Japanese cars tend to be smaller than what you might be accustomed to from domestic manufacturers.

In particular, the tax incentives that make ownership of smaller, lighter cars more compelling are probably the strongest reason why small cars are popular. In fact, this is why Japanese drivers often choose to drive Kei cars as opposed to “regular” small cars.

Of course Kei cars aren’t so popular outside of Japan (although analogous classes of car do exist, particularly in continental Europe where there are similar issues with space/congestion). But even normal Japanese cars that are exported new outside of Japan for sale in other countries – particularly in the hatchback class – tend to be smaller on average than their European and American rivals.

One thing that cannot be overlooked is the fact that cars are also becoming larger across the board. For example, if you read our guide to Honda Civic generations & history you will see clearly how this “compact” car has grown over the years.

This is unavoidable as safety regulations have essentially forced cars to become larger.



  • Sam

    Sam focuses mainly on researching and writing the growing database of Car Facts articles on Garage Dreams, as well as creating interesting list content. He is particularly enthusiastic about JDM cars, although has also owned numerous European vehicles in the past. Currently drives a 3rd generation Suzuki Swift Sport, and a Volkswagen Touareg (mainly kept for taking his border collie out to the hills to go walking)

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