TOKYO—Japan's top three car makers Friday reported solid increases in domestic production for December, in a sign that the worst is over after natural disasters both at home and abroad disrupted their supply chain networks most of last year.

Toyota Motor Corp., Japan's biggest car maker by volume, said that its domestic output rose 17 percent from a year earlier to 284,477 vehicles in December. Honda Motor Co., the country's No. 3 car maker, lifted production 11 percent year-to-year to 92,663 vehicles, reported The Wall Street Journal.

Both car makers returned to normal manufacturing levels by early December after extreme floods in Thailand slowed their production.

Nissan Motor Co., Japan's second largest car maker, built 114,175 vehicles in December, up 25 percent from a year earlier, thanks to a rise in exports of small sport utility vehicles to the U.S. and firm demand for the Serena minivan.

The production jump also reflects a low basis of comparison in the year-earlier month, when demand was slack following the government's termination of subsidies for hybrid and other fuel-efficient vehicles.

Disruption of the supply of parts as a result of the flooding in Thailand hit Japan's big three just when they were ramping up production to compensate for lost time after the massive earthquake and tsunami in March.

While Nissan's output was relatively unaffected by the Thai disaster, Toyota and Honda had to slow output for weeks over the past few months, crippled by a scarcity of electronic parts and some other parts from the southeast Asian country.

Japanese auto makers are counting on new subsidies for car purchases that the government last month decided to reintroduce. The Japan Automobile Manufacturers Association expects the subsidies worth ¥300 billion, or about $3.9 billion, to help boost auto sales in the country 19 percent to 5.02 million vehicles this year.

The government aid prompted Toyota to lift its 2012 sales projection for Japan by 100,000 vehicles to 1.63 million this week. The auto giant is examining whether to raise its production plan in the home country for this year, a Toyota spokeswoman said.

In December, Toyota's sales in Japan totaled 99,542 vehicles, up 25.2 percent, thanks to the increased output and supply of vehicles while it exported 169,366 vehicles from Japan, up 1.6 percent year-to-year.

Honda's sales in its home market declined 1.1 percent to 41,453 vehicles and exports fell 9.7 percent to 24,713 while Nissan's Japan sales gained 32 percent to 45,160 vehicles and exports rose 3.3 percent to 79,024.