Japanese car sales slump in China amid row

Dispute over islands' sovereignty and consumer boycott has hit sales, say Japan's top carmakers

PUBLISHED : Tuesday, 08 January, 2013, 12:00am
UPDATED : Tuesday, 08 January, 2013, 4:21am


Japan's top three carmakers said yesterday that sales in mainland China slumped last year as a consumer boycott sparked by a territorial row took a heavy toll.

Nissan - which has the most exposure to China of the three - said sales in the world's biggest vehicle market last year fell 5.3 per cent to 1.18 million units.

"The Sino-Japanese territorial disputes that began in September have seriously affected Nissan's sales and marketing activities in China," the firm said.

Toyota, Japan's largest carmaker, said its China sales fell 4.9 per cent to 840,000 vehicles, although it forecast a recovery this year, announcing a sales target above 900,000 units.

Honda, meanwhile, said sales in China declined 3.1 per cent last year to 598,576 vehicles, its second straight annual decline, after the 2011 earthquake and tsunami battered Japanese manufacturers' results.

A long-standing diplomatic dispute flared badly in mid-September after Tokyo nationalised East China Sea islands also claimed by Beijing, sparking huge protests across China and boycotts of Japanese products.

The row over the islands, known as the Diaoyus in China and the Senkakus in Japan, hurt Japanese carmakers with operations in the country while boosting demand for other foreign brands.

Japan's top three carmakers, which all have manufacturing facilities in China, scaled back production as sales slumped.

Despite predictions of a bounce back this year, there are plenty of uncertainties that may slow a recovery, including new governments in China and Japan, said Tatsuya Mizuno, an industry analyst at Mizuno Credit Advisory.

"It appears that Japanese auto sales are on course to recover in China, but no one knows when the dispute will flare up again - nothing has been resolved," he said. "There is also concern about the future of the Chinese economy. The prospects for a full recovery of Japanese cars in China are still obscure."

Earlier yesterday, a Japanese industry group said the number of vehicles sold in Japan last year soared 26.1 per cent from 2011, staging a recovery from the twin natural disasters that caused the nuclear accident at Fukushima.

Annual sales of cars, trucks and buses, excluding mini vehicles - four-wheelers with engines under 660 cc - came in at 3.39 million units, the Japan Automobile Dealers Association said.

In 2011, Japan's domestic vehicle sales dropped 16.7 per cent after the quake and tsunami damaged factories and crippled carmakers' supply chains, forcing companies to shutter plants.

By category, sales of passenger cars totalled 3.01 million units last year, up 26.3 per cent from the previous year, while truck sales climbed 24.4 per cent to 363,685 units. Bus sales gained 12.1 per cent to 11,938 units, the industry data showed.

However domestic vehicle sales last month slipped 3.4 per cent to 214,429 units, the data showed, partly owing to the expiry of government subsidies aimed at bumping up sales of eco-friendly cars.

Last month's results were the fourth consecutive monthly decrease, the association said.