Japanese car sales fall further in China

Sales of Japanese cars in China have yet to recover from a territorial dispute that erupted between the two countries in August over the Diaoyu Islands.

Figures released yesterday suggest sales improvements in January were temporary.

Sales in the world's biggest car market of the top three Japanese carmakers - Toyota, Nissan and Honda - fell between 4.1 per cent and 14.1 per cent year on year for January and February combined, in contrast to increases of between 22 per cent and 23.5 per cent reported in January.

Analysts and carmakers said the two months' figures should be read together, because the week-long Lunar New Year holiday, a quiet period, fell in January last year but in February this year.

Honda suffered the smallest drop, 4.1 per cent, for the two months, followed by Toyota (13.3 per cent) and Nissan (14.1 per cent). Mazda's sales decline accelerated in February for a cumulative decline of 19.4 per cent.

The China Passenger Car Association said late last month that the strong growth in China's market for light vehicles in January would be nearly offset by a big decline last month - sales having already dropped by 42 per cent in the first three weeks of February.

Consultancy firm McKinsey & Co said the country's market for luxury cars would continue to perform well and was expected to overtake the United States' as the world's biggest as early as 2016.