Toyota, Nissan car sales slump in China on island row

TOKYO: Japan's top three automakers said yesterday annual sales in China last year slumped as a consumer boycott sparked by a nasty Tokyo-Beijing territorial row took a heavy toll.
Nissan, which has the most exposure to China of the three, said sales in the world's biggest vehicle market last year fell 5.3 percent to 1.18 million units.
"The Sino-Japanese territorial disputes that began in September have seriously affected Nissan's sales and marketing activities in China," it said in a statement.
Toyota, Japan's largest automaker, said its China sales in 2012 fell 4.9 percent to 840,000 vehicles, although it forecast a recovery this year, announcing an annual sales target above 900,000 units.
Honda, meanwhile, said sales in China declined 3.1 percent last year to 598,576 vehicles, its second straight annual decline, after the 2011 quake-tsunami disaster battered Japanese manufacturers' results.
A long-standing diplomatic dispute flared badly in mid-September after Tokyo nationalized East China Sea islands also claimed by Beijing, sparking huge protests across China and boycotts of Japanese products.
The row over the Tokyo-controlled islands, known as Diaoyu in China and Senkaku in Japan, hurt Japanese automakers with operations in the country while boosting demand for other foreign brands.
Japan's top three carmakers, which all have manufacturing facilities in China, scaled back production as sales slumped.
Despite predictions of a bounce back this year, there are plenty of uncertainties that may slow a recovery including new governments in China and Japan, said Tatsuya Mizuno, auto analyst at Mizuno Credit Advisory.
"It appears that Japanese auto sales are on course to recover in China, but no one knows when the dispute will flare up again — nothing has been resolved," Mizuno said.
"There is also concern about the future of the Chinese economy. The prospects for a full recovery of Japanese cars in China are still obscure."
Earlier yesterday, a Japanese industry group said the number of vehicles sold in Japan last year soared 26.1 percent from 2011, staging a recovery from the twin natural disasters which set off the crisis at Fukushima, the worst nuclear accident in a generation.
Annual sales of cars, trucks and buses, excluding mini vehicles — four-wheel vehicles with engines less than 660 cc — came in at 3.39 million units in 2012, the Japan Automobile Dealers Association said.
In 2011, Japan's domestic vehicle sales dropped 16.7 percent after the disaster damaged factories and crippled automakers' supply chains, forcing companies to shutter plants and halt production.
By category, sales of passenger cars totaled 3.01 million units in 2012, up 26.3 percent on-year, while truck sales climbed 24.4 percent to 363,685 units. Bus sales gained 12.1 percent to 11,938 units, the industry data showed.
However domestic auto sales in the last month of 2012 slipped 3.4 percent to 214,429 units, the data showed, partly due to the expiry of government subsidies aimed at bumping up sales of eco-friendly cars.
December's results marked the fourth consecutive monthly decrease, the association said. "It is difficult to cite any decisive factor for the decline in monthly sales... but the end of subsidies still matters the most," an association official said.
Sales of mini-vehicles gained 30.1 percent last year to 1.98 million units.