Sept. 26 (Bloomberg) -- Nissan Motor Co., the top Japanese seller of vehicles in China, led automakers lower in Tokyo trading on mounting concerns about the economic fallout from a territorial dispute between Asia’s two biggest economies.
The maker of the Altima sedan fell as much as 3.2 percent to 660 yen in Tokyo trading, while Toyota Motor Corp. declined as much as 2.7 percent. Honda Motor Co., the nation’s third-largest carmaker, dropped as much as 5 percent.
Nissan said today it’s halting Chinese production three days ahead of schedule to reflect current demand, while Toyota said that it’s adjusting output in the country. The carmakers, who reeled from natural disasters in Japan and Thailand last year, may face an even bigger financial toll from the anti-Japanese protests in the world’s biggest automobile market, according to China’s Passenger Car Association.
“In previous years, they often added shifts around this time to meet rising demand during hot sales season in September and October,” said Han Weiqi, a Shanghai-based analyst with CSC International Holdings Ltd. “Japanese automakers will see their market share being taken away by American and European automakers, as consumers who need to buy cars will simply turn away and buy other brands.”
Nissan will suspend production in China from Sept. 27 and resume output on Oct. 8 in view of the “current market situation,” Chris Keeffe, a company spokesman, said by telephone today. The company makes cars in the country with Dongfeng Motor Corp.
Toyota will adjust production in China to meet demand, said spokesman Joichi Tachikawa. The Asahi newspaper earlier reported the automaker plans to produce no cars in the country in October.
Mazda Motor Corp. is suspending output at its venture two days earlier than usual for China’s national holidays next month as the plants prepare for production of the CX-5 model next year, according to Michiko Terashima, a company spokeswoman. The automaker is still assessing the impact of the anti-Japan strife, Terashima said.
Honda President Takanobu Ito said Sept. 21 that while the company’s plans to strengthen its China business remains unchanged, the automaker hasn’t fully recovered from the earlier suspension due to parts procurement and safety concerns.
Sales of Japanese-branded passenger cars fell last month in China, compared with gains of more than 10 percent for German automakers including Volkswagen AG and Bayerische Motoren Werke AG, after tensions flared over a long-standing territorial dispute involving a group of islands known as Diaoyu in China and Senkaku in Japan. American brands sold by General Motors Co. and Ford Motor Co. also rose last month.
The impact on Japanese car sales will extend into next month as escalating tensions deter consumers, said Akio Toyoda, president of Toyota and chairman of Japan’s auto association, on Sept. 20.
“If the Chinese, Koreans and maybe the Taiwanese are not willing to buy Japanese cars, the sales of Japanese automakers will suffer, and so will their share prices,” said Yuuki Sakurai, President of Fukoku Capital Management. “You can’t leave the Chinese market but you may try to move the production line out of China for the time being. It depends on how they are going to cover their risks.”
Many dealerships in China that sell Japanese cars shut after some showrooms were attacked and vandalized this month, according to Luo Lei, deputy secretary general of the state-backed China Automobile Dealers Association. The sales declines will likely hurt the Japanese manufacturers more than last year’s earthquake and tsunami, which closed factories across Japan, Luo said.
The Shanghai-based Passenger Car Association predicts Japanese brands will lose their lead over German nameplates in the country for the first time since 2005.
Some dealerships selling competing brands have introduced marketing campaigns to attract buyers shunning Japanese cars.
A Buick showroom in eastern Zhejiang province is offering cash rebates and gift bags to buyers who trade in their Japanese cars, according to Chen Linling, a saleswoman at the dealership.
“Business has been quite good and we’ve been busy since we started the promotion,” Chen said by telephone. “We rolled out this marketing move after the Diaoyu protests in China.”
Hawtai Motor Group Co., the Beijing-based carmaker whose sport utility vehicle is outsold more than 50-to-1 by Honda’s CR-V, urged Chinese consumers to buy local brands as it introduces this week a “Patriot” edition of its Boliger SUV featuring a paint job with a stylized China national flag.
“As a Chinese, purchasing China’s homegrown auto brands is the most efficient and direct way to support our country’s national economy,” Hawtai said in the statement. Consumers should drive the Boliger Patriot and “fill the streets with the songs of patriotism praising our mighty nation.”
Some dealers have taken extreme measures to capitalize on anti-Japan sentiment. Volkswagen’s Audi said earlier this month it 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.
China’s homegrown automakers have lost a quarter of their market share in the past two years, according to China Association of Automobile Manufacturers data. Toyota, Nissan and Honda, Japan’s three largest automakers, accounted for four of the 10 best-selling SUV models in the first eight months of this year, the data show.
To contact the editor responsible for this story: Young-Sam Cho at email@example.com