The firms produced 10,929,918 vehicles abroad, up 10.6 percent from the preceding year and compared with domestic production of 10,893,529 units, up 2.6 percent, the Japan Automobile Manufacturers Association said.

"Local production expanded in all regions except the Middle East," it said in a statement, although overseas production for the January-March quarter was higher than a year earlier in all regions.

Japanese carmakers have steadily expanded their offshore production including in the United States whose own automakers are slashing jobs.

Japanese companies were quicker than their US counterparts to focus on environmentally friendly cars, which have proved a hit amid soaring oil costs. The yen's advance against the dollar has also persuaded Japanese firms to build abroad.