But Honda is still No. 2 among Japan's carmakers in market capitalization. And last week, Honda improved on its standing with the second-largest market cap of any Japanese company, period.
Even as Honda slid behind Nissan in sales, investors were voting with their pocketbooks on Honda's solid earnings and its forecast for some of the fattest profits in the auto industry.
As Honda shares closed 2 percent higher on Feb. 1, local media were quick to report that its market capitalization eclipsed the previous No. 2, Japanese mobile phone provider DoCoMo. It was Honda's first time ranked second since the 1980s, Japan's Nikkei business daily said.
Not surprisingly, Toyota Motor Corp. -- the world's largest automaker in terms of global sales volume -- also is Japan's largest company in terms of market capitalization.
Toyota, with nearly twice as many outstanding shares as Honda, had a market capitalization of 12.03 trillion yen ($146.4 billion) at the Tuesday close of the Tokyo Stock Exchange.
Honda, whose shares have risen 26 percent since August, stood at 6.45 trillion yen ($78.5 billion). Nissan was No. 3 among automakers, capitalized at 3.94 trillion yen ($47.9 billion).