Diaoyu Islands

Japan car sales dive in China over Diaoyu dispute

Toyota, Honda and Nissan report sharp falls in mainland sales in reaction to Diaoyus row

PUBLISHED : Wednesday, 10 October, 2012, 12:00am
UPDATED : Wednesday, 10 October, 2012, 3:39am


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Japan's top three carmakers yesterday said their sales in China dived last month in the wake of anti-Japan protests over disputed islands in the East China Sea.

Toyota's drop was the steepest, with monthly sales falling 48.9 per cent year on year to 44,100 vehicles. Nissan's sales fell 35.3 per cent to 76,066 while Honda's dived 40.5 per cent to 33,931 units.

The massive drop in sales illustrates how badly Japanese carmakers have been hit after their government's decision to "purchase" Diaoyu Islands, claimed by both China and Japan, triggered protests and demonstrations in major mainland cities last month.

Japanese factories and businesses across the mainland closed or cut back operations over fears that they could be targeted by protesters during an upsurge of nationalistic sentiment.

The Japanese car brands, which used to lead the mainland's passenger car market, were overtaken by German makers last month although their combined sales in the first nine months of the year still beat manufacturers from other countries.

The Passenger Car Association predicts Japanese brands would lose their leadership position in the market this year for the first time since 2005. Their market share was forecast to drop to 22 per cent from 23 per cent last year, according to the association.

Both Honda and Toyota, the world's largest carmaker by sales in the first half of the year, yesterday said they would continue "adjusting" production in China.

There have been reports that Japanese manufacturers planned to halve output in the country.

Toyota has nine production sites on the mainland, including in Tianjin, Guangzhou and Sichuan province.

A Nissan spokeswoman told Dow Jones yesterday: "Most of our business is back to normal now, but we are still assessing the situation."