Nov. 22 (Bloomberg) -- Toyota Motor Corp., which saw its China sales plunge for the last two months, said it expects demand for Japanese cars to soon return to levels before protests erupted in September over a territorial dispute.
Retail sales at its Chinese joint venture, GAC Toyota Motor Co., have rebounded close to levels before the wave of anti-Japan sentiment, Feng Xingya, executive vice president of the venture, said at a briefing in Guangzhou yesterday. The automaker cut production to ease pressure on the dealerships and stockpile levels have “reduced dramatically” in the past two months, he said.
“The faster the sales recover the better,” Kunihiko Ogura, Toyota managing officer and president of its joint venture with Guangzhou Automobile Group Co., said at the same briefing. “Our sales are recovering steadily and will return to normal in the not-too-distant future.”
Toyota’s projection adds to evidence that Japanese automakers are becoming more confident the consumer backlash is fading in the world’s largest auto market. Nissan Motor Co. said this month its orders and dealership traffic in China had rebounded. The automakers will join General Motors Co. and Volkswagen AG at the Guangzhou auto show this week, the first major marketing event since rioters smashed cars and torched dealerships two months ago.
Toyota rose 2.2 percent to close at 3,435 yen in Tokyo yesterday before the briefing. The benchmark Nikkei 255 Stock Average gained 0.9 percent.
“The general expectation in the market is for the situation to gradually normalize in the January-to-March period next year,” Satoru Takada, a Tokyo-based auto analyst at Toward the Infinite World Inc., said by phone. “China is the world’s biggest car market and Japanese carmakers have invested a lot into this country already, so withdrawing its plans or not attempting to recover sales is not an option.”
Toyota, which took on more exhibition space at this year’s Guangzhou show, will announce its plan for a new joint venture brand “very soon,” Ogura said. The automaker is also sticking to its plan to expand in the smaller, or so-called third- and fourth-tier cities, by setting up satellite dealerships, according to Feng.
Japanese car sales plunged in China in September and October after tensions escalated over ownership of a group of uninhabited islands -- known as Senkaku in Japan and Diaoyu in China -- prompting Honda Motor Co. and Nissan to cut their full-year profit forecasts by a fifth.
Japan’s automakers may suffer production cuts into 2014 and lose a combined 650,000 units in vehicle output if tensions don’t abate between the two countries, according to estimates by IHS Automotive.
To contact Bloomberg News staff for this story: Tian Ying in Beijing at firstname.lastname@example.org
To contact the editor responsible for this story: Chua Kong Ho at email@example.com