Toyota Pushes Back Plan to Make China Million-Unit Market
Toyota Motor Corp. (7203) pushed back plans to make China its third million-unit market until after this year as Asia’s biggest carmaker waits for anti-Japan sentiment to subside and demand to return to normal.
The maker of Camry sedans, which as recently as September forecast China sales would reach 1 million in 2012, said today it expects deliveries in the country to rise about 7 percent to 900,000 vehicles in 2013 after they fell 4.9 percent last year. Sales in December dropped 16 percent to 90,800, the sixth straight monthly decline, the company said in a text message.
Toyota and other Japanese automakers have increased discounts and extended guarantees to win back customers after violent demonstrations broke out in major cities across China in September over a territorial dispute between Asia’s two biggest economies. Honda Motor Co. (7267) and Nissan Motor Co. (7201) also reported annual sales declines in the country today.
“China is the world’s biggest car market, so we need to do our best to sell our cars there,” Akio Toyoda, Toyota’s president, told reporters in Tokyo today.
Toyota sold 840,500 vehicles in China last year, the first annual drop based on company figures stretching back to 2002. Nissan and Honda reported declines of 24 percent and 19 percent, respectively, in December China sales, bringing full-year deliveries to 1.18 million and 598,576 vehicles.
“The Chinese market is recovering,” Toshiyuki Shiga, chief operating officer at Nissan, said in Tokyo today. The company, which reported a 5.3 percent drop in 2012 China sales, hopes demand will return to normal after the Lunar New Year in February, he said.
Honda’s sales in China have rebounded to about 70 percent to 80 percent of normal levels and may take longer than until the Lunar New Year to recover fully, Fumihiko Ike, chief financial officer at Honda, said today in Tokyo.
“It’s looking like the roots are rather deep,” Ike said. Honda reported deliveries in China fell 3.1 percent in 2012.
Toyota fell 1.8 percent to close at 4,185 yen in Tokyo before the announcement. The stock gained 56 percent last year, compared with the 23 percent advance in the benchmark Nikkei 255 Stock Average. Honda declined 1.2 percent and Nissan slid 0.4 percent today.
Toyota sells more than 1 million vehicles a year in the U.S. and Japan, its two largest markets.
GAC Toyota Motor Co., a Toyota joint venture in China, pledged to waive punitive measures imposed on dealerships for failing to meet sales targets in the wake of the demonstrations and subsequent plunge in demand.
“Sales of Toyota and other Japanese carmakers have shown clear signs of recovery since October,” said Vivien Chan, a Hong Kong-based analyst at Oriental Patron Holdings, who predicts deliveries will normalize around the second quarter of this year. “The measures they took after the protests have proven to the very effective.”
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, an industry researcher.
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