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Islands dispute benefits carmakers' competitors

Publication Date : 09-10-2012


Animosity toward Japan gives boost to US, European, South Korean firms

Japanese automakers are losing market share in China to their European, US and South Korean rivals as animosity toward Japanese products amid the dispute over the Diaoyu Islands (known in Japan as Senkaku) proves a drag on their sales in the world's largest automobile market.

German automakers, including Volkswagen Group, BMW AG and Daimler AG, have yet to release their sales figures for September. Analysts, though, said they expect them to reveal a "beautiful" performance, especially as those companies' Japanese competitors have been hit seriously by the anti-Japanese protests that broke out in mid-September after the Japanese government's illegal "purchase" of the Diaoyu Islands.

Statistics from the China Association of Automobile Manufacturers suggest that German carmakers' share of the Chinese market for passenger cars surpassed their Japanese rivals' for the first time in August.

South Korean and US automakers have also reported that they saw their vehicle sales in China reach a record high in September.

South Korea's Hyundai Motor Co. and its affiliate Kia Motors Corp. said their combined sales increased 9.5 per cent year-on-year in the month, going from 116,763 vehicles in September 2011 to a record high of 127,827 vehicles last month. The South Korean company said it expects to exceed its previous goal of selling 1.25 million vehicles in the world's top automobile market in 2012.

And General Motors, the largest foreign automaker in China by sales, reported yesterday that it and its joint ventures saw their September sales reach a record high this year.

The Financial Times reported on Friday that Toyota Motor Corp. has decided to reduce its output at its Chinese factories by more than half in October and to cease exporting its premium brand Lexus vehicles to China. The company cited the Diaoyu Islands issue as a reason behind both decisions.

The newspaper reported that Toyota's sales in China decreased by about 40 per cent from a year earlier in September, citing an unnamed person briefed on the data and the company's production and export plans.

Yet, Liu Peng, a spokesman for Toyota China, told China Daily that the report contained misinformation, saying "we will adjust our production plans according to market demand at all times. But these details about the production cut come from nothing but idle speculation".

"And as for imports of Lexus luxury vehicles, we will never stop those."

Toyota plans to release its official September sales figure for China within a week. Its sales in the country are the source of about 10 per cent of its global business.

The Japanese newspaper Nikkei meanwhile reported that Mazda's sales in China had decreased by 35 per cent year-on-year in September.

And Shen Li, public relations director of Nissan China, said Nissan has no plans to slow its production in China or reduce its 2012 sales target for the country.

Luo Lei, deputy secretary-general of the China Automobile Dealers Association, said the dispute over the Diaoyu Islands has had effects "far beyond our expectations, effects that will last for a long time".

"They [Japanese automakers] are finding it impossible to meet their sales target for the year," Luo said. "And the situation will be hard to remedy in the future."

The first half of the year had seen Japanese automakers just starting to recover from the effects of the earthquake and tsunami disaster that struck their country last year, prompting Nissan and Toyota to initially lift their sales goals for 2012 by 20 per cent.

"But China's vehicle market is only going to be affected to a small extent, as Chinese consumers show little loyalty to particular brands," Luo said.


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