(Corrects company name of analyst in third paragraph of story published Nov. 29.)
Nov. 29 (Bloomberg) -- Toyota Motor Corp. production in China fell the most in at least a decade, leading a slump for Japanese automakers, after a sovereignty dispute over uninhabited islets triggered demonstrations and deterred buyers.
Japan’s biggest carmaker said today China output in October tumbled 61 percent to 30,591 units in October. Nissan Motor Co. reported production fell 44 percent last month, the biggest decline based on company data stretching back to 2009, and Honda Motor Co. said output tumbled 54 percent -- also a record.
“This is worse than we had expected and it shows how serious the backlash from Chinese consumers was,” Lin Huaibin, a Shanghai-based analyst at IHS Automotive, said by phone. “Sales have started to pick up in November and with some carmakers such as Honda introducing new models, the worst may be over for the moment.”
The cuts highlight the widening costs of a territorial dispute that in September led rioters to vandalize Japanese-branded dealerships and vehicles in the world’s largest car market. Japanese automakers’ share of the China’s sales has fallen to 14 percent from about 23 percent before September, according to Xu Changming, a director at China’s State Information Center.
Production won’t start recovering until next year, according to Akiko Itoga, a spokeswoman for Tokyo-based Honda.
Retail sales at Toyota’s 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 Nov. 21 briefing in Guangzhou. The automaker cut production to ease pressure on the dealerships and stockpiles have “reduced dramatically” in the past two months, he said.
Mazda Motor Corp.’s China output declined 28 percent in October, the Hiroshima, Japan-based automaker said today in a statement. The company shipped no cars to the country last month, compared with 441 units a year earlier, as production of its main export model the CX-7 is being shifted to China, according to spokesman Makoto Watanabe.
Fuji Heavy Industries Ltd., maker of Subaru cars, said October exports to China fell 76 percent to 1,734 units and sales fell 72 percent to 1,468 units. The carmaker doesn’t make vehicles in China.
The slump is making cars cheaper. Chinese dealer Pang Da Automobile Trade Co. bought Subaru vehicles at a discount of about 10,000 yuan ($1,600) each, Pang Qinghua, chairman of the company, said in an interview at a dealership conference in Suzhou, China, today.
Japanese car sales have plunged after tensions escalated over ownership of a group of uninhabited islands -- known as Senkaku in Japan and Diaoyu in China -- prompting Honda and Nissan to cut their full-year profit forecasts by a fifth.
Japanese 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.
“In the long run, Japanese carmakers’ market share in China will still be declining,” said Lin of IHS Automotive.
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