Honda made 2.91 million vehicles not including motorbikes in 2011, it said, down 20.2 percent as auto manufacturers struggled with natural disasters, a rising yen and the European economic slowdown.
The figures came as Japan's major car firms announced their annual production for 2011.
Toyota, which had already confirmed earlier this week it had lost its position as the world's biggest carmaker, said it produced 7.86 million vehicles, down 8.2 percent.
Nissan, 44.3 percent owned by French partner Renault, was the only leading Japanese carmaker to increase annual global production despite supply chain disruption from the country's earthquake disaster and floods in Thailand.
It produced 4.63 million units, up 14.3 percent from a year ago, while global sales hit a record 4.67 million vehicles, it said.
Mitsubishi Motors, the nation's fourth largest automaker, produced 1.14 million vehicles, a 2.8 percent drop.