Toyota Motor Corp. (7203) and Nissan Motor Co. (7201) reported their biggest drops in China sales since at least 2008 after consumers shunned Japanese cars amid a territorial dispute between Asia’s two largest economies.
Toyota's September deliveries tumbled 49 percent from a year ago, Nissan's fell 35 percent and Honda Motor Co. posted a 41 percent drop, the companies said today. Toyota and Nissan had their biggest declines on record, while Honda sales were the least since May 2011, according to monthly statements compiled by Bloomberg stretching back to 2008.
Japanese auto brands may lose their collective market-share lead in China for the first time since 2005 after rioters torched dealerships and smashed cars in protests over disputed islands. The slump in China demand is the third crisis for the automakers in less than two years, after the Japanese tsunami and Thai floods that destroyed factories and disrupted supply lines.
“People are afraid of buying Japanese cars,” said Satoshi Yuzaki, Tokyo-based general manager at Takagi Securities Co. “If the situation doesn’t settle and if Japanese carmakers can’t quantify the impact soon, there will be a lasting effect on their earnings.”
Honda fell 2.5 percent, the most since Sept. 28, to close at 2,361 yen in Tokyo, where it is based. Toyota, Japan’s largest carmaker and located in Toyota City, dropped 1.5 percent to 3,000 yen and Nissan slid 1.9 percent. By comparison, the Nikkei 225 Stock Average declined 1.1 percent.
Toyota's China sales dropped to 44,100 vehicles last month, Nissan's shrank to 76,066 and Honda's fell to 33,931, they said.
Mazda Motor Corp. (7261) reported Oct. 4 that deliveries in the country tumbled 35 percent to the lowest in 19 months, while Mitsubishi Motors Corp. (7211) said a day later that Chinese sales plunged 63 percent. Suzuki Motor Corp. (7269) said today its sales fell 43 percent.
Automakers from Japan, which as a group have a higher share of China’s market than any other foreign country, are bracing for what may become a bigger crisis in the nation than last year’s natural disasters, according to the China Passenger Car Association. Their share will fall to 22 percent this year from 23 percent in 2011, according to the association.
The territorial dispute over the group of islands -- known as Senkaku in Japanese and Diaoyu in Chinese -- may cause the Japanese economy to contract this quarter and hasten a current account slide as exports decline and Chinese tourism to Japan drops off, according to JPMorgan Chase & Co.
Toyota and Honda reported damage to dealerships from fire last month, while TV footage showed overturned Japanese cars and window shields smashed by demonstrators in some cities.
Nissan, based in Yokohama, Japan, will weigh the impact of the Chinese protests before deciding whether to revise its sales target there, Executive Vice President Takao Katagiri said on Oct. 5. Japan’s three largest automakers plan to cut production to half of normal levels in China, the Nikkei newspaper reported on Oct. 8.
Dion Corbett, a Tokyo-based spokesman at Toyota, said today that it’s “looking very difficult” for the company to meet its target of selling 1 million vehicles in China this year.
Slumping sales of Japanese brand cars may have weighed on China’s total vehicle deliveries last month. Auto sales may have increased 2 percent from a year earlier to 1.35 million units, according to the average estimate of nine analysts surveyed by Bloomberg.
Most non-Japanese brands appear to be benefiting.
Volkswagen AG (VOW)’s luxury Audi unit boosted sales by 20 percent last month to 35,512 vehicles, according to the German company. Audi last month asked a Chinese dealer to remove a banner advocating the murder of Japanese people after a photograph of the sign went viral on the Internet.
South Korea’s Hyundai Motor Co. (005380) and affiliate Kia Motors Corp. (000270) said Oct. 7 they will probably sell more vehicles in 2012 than the 1.25 million they had projected and that combined deliveries rose 9.5 percent to a record.
General Motors Co. (GM), the largest foreign automaker in China, may be missing out. Yesterday, the company reported its slowest China sales growth in eight months and said deliveries of Buicks and Cadillacs declined.
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