Japanese carmakers record sales growth in China

Industry leaders Honda and Nissan record sales growth in January, snapping a four-month decline sparked by dispute over islands

PUBLISHED : Monday, 04 February, 2013, 3:07pm
UPDATED : Friday, 08 May, 2015, 4:41pm

Three major Japanese carmakers started the year on a good note on the mainland as their sales last month showed growth for the first time in four months.

But analysts said they still faced an uphill battle amid vigorous competition and diminishing growth in the world's biggest car market.

Honda Motor said yesterday it sold 47,248 cars with its joint-venture partners last month, an increase of 22 per cent from a year earlier.

Nissan Motor said it sold 115,700 cars, 22.2 per cent more than January last year.

That marked the first increases since August when a territorial dispute between China and Japan over the Diaoyu Islands in the East China Sea sparked violent anti-Japanese protests across the mainland, hurting sales of all Japanese goods in the country.

The carmakers' announcements came after Toyota Motor said last Friday that sales with its two mainland partners jumped 23.5 per cent to 72,500 units last month.

The figures were skewed as the Lunar New Year holiday - during which car showrooms are closed for the long break - fell in January last year. The Lunar New Year this year falls this month, on Sunday.

Mazda Motor, another Japanese carmaker which is in a three-way joint venture with Ford Motor and Chongqing Changan, said sales dropped 16.1 per cent last month, although it was an improvement from December, when sales fell 26.4 per cent.

One analyst said that while this year should be better for the Japanese carmakers, it was unlikely their vehicles could regain their dominant position in the country's passenger car market.

"In 2008 and 2009, Japanese brands' market share in their two most competitive sectors - medium-sized cars and compact sport utility vehicles - reached up to 60 per cent and 72 per cent, respectively," said John Zeng, of LMC Automotive.

"But with their German rivals continuing to lower the prices of their products and challengers like Ford launching new products targeting directly against the Japanese cars, their market share had fallen to between 30 and 40 per cent over the years."

In the long run, Japanese carmakers might have to rely on indigenous brands co-founded with their mainland partners for growth, Zeng said.

Dongfeng Honda, the better performer among its Japanese counterparts, said earlier it would seek to raise its sales target this year by 21.5 per cent to 340,000 units, while Toyota predicted a much milder increase of 7.1 per cent to 900,000 cars this year.

According to the China Automobile Manufacturers Association, Japanese cars' market share on the mainland dropped to 16.4 per cent last year from 19.4 per cent in 2011.