In September Honda, Mazda, Mitsubishi, Nissan and Toyota were all forced to halt production and close dealerships following disruption that flared up when Japan announced it would purchase the islands, known as the Diaoyu by the Chinese and the Senkaku by the Japanese. The situation was exacerbated by the timing of the announcement, which came around the anniversary of Japan’s invasion of China in 1931 and was reported as “the worst outbreak of anti-Japanese sentiment in decades” (read more here).
While protests have now largely died down in China, that sentiment appears to show no sign of dissipating when it comes to making vehicle purchases.
Honda, which builds vehicles in partnership with Dongfeng Motor and Guangzhou Automobile, has seen sales in the country drop by more than half, down 53.5% in October to just more than 24,000 from 52,000 in the same month last year. Meanwhile, Nissan reported a drop in deliveries of 41% for the same month to 64,300 and Toyota saw deliveries fall 44% in October to 45,600. Mazda saw a drop of 45%, selling just 9,500 vehicles through the month. Mitsubishi saw a drop of 63% in September.
The decline has meant that the companies are having to revise output targets at their China-based plants, as well as exports from Japan.
“In terms of production, the plants of our local affiliates are operating almost normally,” a spokesperson for Toyota told Automotive Logistics News. “Of course, we are adjusting production in accordance with the situation… we are also adjusting exports in accordance with demand.”
Nissan admitted it had been experiencing sales difficulties in China over the past couple of months but said that they had been recovering gradually and it expected the situation to improve towards the end of this year.
“To reduce the burden of inventory at our dealers in China, we have trimmed wholesales in October,” said a spokesperson for the company. “At the same time, retail sales in October have recovered to a level of 70% against the same period last year, and we are looking forward to further recovery from November onward. This will go a long way to keeping inventories at prudent levels.”
For rival foreign carmakers the dispute has been good news, with sales up significantly for GM and its China joint ventures, as well as for Ford.
October sales were up 14.3% on an annual basis for GM. The company reported that Shanghai GM sold almost 118,000 vehicles in October, a year on year increase of 13.8%, while SAIC-GM-Wuling saw domestic sales rise 15.9% on an annual basis to around 130,000. FAW-GM sold more than 4,000 vehicles in China, down 2.7%. With sales at Buick, Chevrolet, Cadillac and Wuling also up, GM and its joint ventures sold around 2.3m vehicles in the first 10 months of 2012, an increase of 10.5% year on year and a new record for the period.
Ford, meanwhile, has reported passenger car sales in China up by 54% last month. With its joint venture partners the carmaker made total sales of nearly 60,000 units in September, which it said was a 35% increase compared to the same month last year. It meant that for the first three quarters of the year Ford sold more than 428,000 vehicles, an 11% increase on the same period in 2011.
A spokesperson for Ford said that sales in China had started to climb significantly in August, prior to the outbreak of the Sino-Japanese territorial dispute and that it had subsequently increased production of the Focus at its new facility in Chongqing.
They went on to say that the plant and its workforce were working overtime and on weekends to fulfill additional customer and dealer demand for the vehicle. “Ford had its best-ever sales month in China in September and October. Retail sales for the New Focus surpassed 20K units in October.”
Korean carmakers have also been benefiting from the anti-Japanese sentiment. Hyundai has reported that sales of its vehicles in China jumped 37% in October compared to the same month last year, with more than 80,500 vehicles sold.