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Japanese carmakers report Sept sales as 'disastrous'

Publication Date : 10-10-2012


Japanese automakers reported a "disastrous" decline in sales in September in the world's largest vehicle market as rising anger over Japan's illegal "purchase" of China's Diaoyu Islands kept consumers away from their showrooms.

Toyota Motor Corp said on Tuesday that its September sales in China dropped 48.9 per cent year-on-year to 44,100 units, the biggest decline since January 2008.

Honda Motor Co also reported that its monthly sales dived 40.5 per cent year-on-year to 33,931 units in September, the lowest figure since May 2011.

According to Dongfeng Motor Corp, the Chinese partner of Nissan Motor Co, sales of the Japanese brand's made-in-China vehicles decreased 34.6 per cent from a year earlier, while Suzuki Motor Corp said its sales in China dropped 42.5 per cent year-on-year.

On Friday, Mitsubishi Motors Corp announced a sales decline of 63 per cent in September, while the month saw Mazda Motor Corp's China sales drop 36 per cent.

"Japanese automakers and their suppliers face a tough future in China in the immediate aftermath of the protests that took place in mid-September," said Namrita Chow, senior analyst of IHS Automotive.

Nissan, Toyota, Suzuki and Mitsubishi had all previously been enjoying sales growth in China, but the next few months are likely to see severe declines which could seriously harm their prospects of meeting their 2012 sales targets.

The outlook for Japanese carmakers in China "does not augur well, with IHS Automotive forecasts expecting an immediate drop in sales and production amid concerns that the situation may extend for a longer period than previously thought", Chow added.

IHS Automotive currently estimates that output and sales for Japanese automakers in China will be cut by 200,000 units this year, amounting to around 20 per cent of sales of Japanese branded vehicles in China.

In 2013, IHS Automotive expects a fall of around 100,000 units based on the two countries finding a peaceful resolution in the immediate future.

"Their (Japanese automakers') future depends on how quickly diplomacy can solve the situation," said Chow.

"Should the situation spiral and Japanese OEMs (Original Equipment Manufacturers) start cutting output even more, lost volumes will significantly increase."

China has been the most important market for Japanese automakers since 2005.

In 2011, Nissan's sales in China accounted for about 27 per cent of its global total, while Toyota sold about 12 per cent of its vehicles in China.

The world's largest automobile market also accounted for 20 per cent of Honda's global sales, while the figure stood at 18 per cent for Mazda.

Statistics from consulting firm AlixPartners show that by the end of August, Japanese automakers' market share in China dropped from 21.6 per cent in 2011 to 21.2 per cent, while German brands boosted their holding from 21.3 per cent in 2011 to 23.3 per cent. South Korean vehicle producers saw their market share in China increase by 0.3 percentage points to 9.3 per cent.

For the first time since 2005, Japanese automakers have lost their leadership in China's automobile market.

German luxury vehicle brand BMW AG reported 55 per cent year-on-year sales growth in September, with sales of its lifestyle brand Mini surging by 121 per cent.

Also from Germany, Audi AG's sales in China increased 20.5 per cent year-on-year in September while Mercedes-Benz sold 10.6 per cent more vehicles than last year in the country.

General Motors, the largest foreign automaker in China in terms of sales, said on Monday that it sold an all-time high of 244,266 vehicles in its biggest market in September, an increase of 1.7 per cent from September 2011.

Hyundai Motor Co and its affiliate Kia Motors Corp said that their combined sales increased 9.5 per cent to a record high in September.


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