Car production in Japan in the Taisho and early Showa periods

1898: The first car debuts in Japan
The very first time that an automobile was driven in Japan was in 1898. It is reported that the car in question was a Panhard Levassor imported from France, and that it traveled from Tsukiji to Ueno in Tokyo. This was just 12 years after Daimler produced the world’s first 4-wheel automobile powered by a gasoline engine (1886).
Excited by the possibilities of this new mode of transport, some Japanese immediately set to work on their own prototype cars. In 1904, T. Yamaha of Okayama developed the Yamaha Steam Automobile; in 1907, the Tokyo Jidosha Seisakusho announced the Taklee; in 1914, Kwaishinsha produced the DAT; and in 1921, the Hakuyosha Company launched the Automo.
Nevertheless, there was still a long way to go before mass production of these domestic cars would be possible, so in the period that spans the end of the Taisho period (1912-1926) and the start of Showa (1926-1989) the Japanese car market was monopolized by American imports. In 1924 Ford started operations in Japan, followed by General Motors (GM) in the following year. Ford Japan was to build up an annual production capacity of 20,000 cars, while GM Japan was close behind with 16,000.
If we look at the data for 1932, the year before Nissan Motor started operations, the total car supply in Japan was 16,000 units, of which domestic models accounted for a mere 5.5% (880 units).

Production capacity leaps with completion of Yokohama Plant
Before the completion of Nissan Motor’s Yokohama plant, Datsun production was based in the Osaka Plant (the former Osaka factory of the Dat Jidosha Seizo Co.). It was a small-scale operation, producing 10 cars in 1931, 150 in 1932, and 202 in 1933.
In 1934, when manufacturing operations switched to Nissan, output leaped to 1,170 units. And when the Yokohama Plant - with its belt conveyors and other modern equipment - came on line in April 1935, output reached 2,800 units. In the following year all production was concentrated in the Yokohama Plant and output grew further to 6,163 units. In 1936, with the addition of Nissan models, output reached 8,353 units, and in two years it topped the 10,000 mark. This was the largest mass production system ever seen for "Made in Japan" automobiles.
In 1936, a new Law Concerning the Manufacture of Motor Vehicles stipulated that any automobile manufacturer with an annual output of more than 3,000 units was required to obtain a license from the government. This effectively limited the activities of foreign-owned manufacturers like Ford Japan and GM Japan, and from 1940 onwards they effectively ceased to operate.