Japan's pain has largely been North America's gain.
Japanese domestic annual output has tumbled 26 percent since its peak in 1990. And exports account for a smaller slice of that production.
Shipments to North America have eroded most, falling by nearly half since the late 1980s. Today vehicles bound for North America account for just 36 percent of Japan's exports; back then it was 56 percent -- and more than one in four cars built in Japan.
Those exports will keep falling, thanks to the biggest wave of Japanese capacity expansion to hit North America in a decade.
Mazda, Honda, Nissan, Toyota and Subaru have committed to enlarging North American factories or building new ones this year and next.
Toyota, in addition to adding 50,000 units of Highlander production in Princeton, Ind., plans to have Mazda's new factory in Mexico produce 50,000 Toyota units in 2015.
Meanwhile, North American production by Japanese brands rose to a record 5.1 million units last year, from just 296,569 in 1985.
"Japanese manufacturers' localization strategy will have a big negative impact on Japanese production over the next few years," says Masatoshi Nishimoto, manager for Japan and Korea forecasts at IHS Automotive. "And it isn't going to stop."
The downturn is palpable along the sprawling wharfs of the Port of Mikawa, just south of Nagoya. Massive car lots, built in better times for overseas-bound Suzuki and Mitsubishi vehicles, are half empty.
Mikawa is Japan's second-biggest export hub, with cars accounting for 96 percent of its business and the United States gobbling up 70 percent of its shipments. But traffic is down drastically.
In 2010, the last normal year before the 2011 earthquake and tsunami, Mikawa exports were down 35 percent from their record high in 2007.
"I don't think they're going to get back to those levels," says Kazutaka Suzuki, chief examiner at Mikawa Port Authority.
The march to North American factories undercuts the country's exports. And American arms of the Japanese automakers now boast about their economic impact on U.S. manufacturing.
At Honda, 90 percent of the light vehicles it sold in the United States last year were manufactured in North America. That will climb to 95 percent soon as Honda becomes a net exporter from North America, says Ed Miller, a Honda spokesman in Detroit.
"Weren't imports going to kill our industry?" Miller says. "Who would have thought foreign companies would bring manufacturing -- and in our case, manufacturing leadership -- to these shores?"
At Toyota, 70 percent of the cars it sold in the United States were built in North America. Last year its exports from the United States surged 45 percent to a record 124,084 vehicles.
And for the third straight year, the Toyota Camry sedan topped the Cars.com American Made Index, which ranks vehicles based on the percentage of U.S.-made components and labor.
Nissan notched a North American local build rate of 67 percent. And that will increase this year when the company opens an assembly plant in Aguascalientes, Mexico -- its second in that city and its third in Mexico -- with capacity to make 175,000 vehicles a year.
Nissan also is moving production of its Rogue crossover to the United States this year, and Murano production will follow in 2014. U.S. production of the Leaf electric vehicle began in January.
Perhaps most perverse for the Japanese: Nissan is now Japan's No. 2 import brand, just behind Volkswagen. Last year it shipped 42,422 vehicles to Japan, mainly from Thailand, because it has become too costly to build small cars at home.
Imports have always been just a sliver of the Japanese auto market, in part because of the difficulty non-Japanese makers have faced in signing up existing Japanese-brand dealers. But if Japanese makers begin putting their overseas-built cars into their existing retail network, those so-called reverse imports could take share from cars built in Japanese plants.