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October 10, 2012

Japanese Car Sales Plummet in China

HONG KONG — Japanese automakers suffered plunging sales in China last month and have cut manufacturing by up to half in China this month after violent anti-Japanese protests in which Japanese-brand cars and even their owners were targeted.


Toyota announced on Tuesday that its sales to dealerships in China dropped 49 percent in September from the same month a year ago, while Honda said that its sales had fallen 40 percent and Nissan said that sales were down 35 percent.

Mazda said last week that its sales had fallen 35 percent last month. Japanese automakers have sharply cut production schedules through the end of October, a sign that they see little immediate improvement on the horizon, although they have followed corporate traditions so far of refraining from layoffs.

Automakers only release figures for their sales to dealerships in China, as the government has halted the release of retail sales figures by dealerships to consumers for the past year.

When a 51-year-old man in Xi’an made the innocent mistake on Sept. 15 of driving with his family in a Toyota Corolla past an anti-Japanese demonstration, he was so severely beaten that he remains partially paralyzed from brain injuries, while the car was destroyed.

The law enforcement authorities in another province detained last week the main suspect in the beating, a spokesman for the Xi’an police said by telephone on Tuesday.

The attack on the man and his car was briefly the most searched topic on Sina Weibo, a Chinese microblogging site resembling Twitter, as many suggested that the demonstrators had gone too far.

In a separate video widely circulated on the Internet within China and aired on television overseas, a mob overturned a Honda CR-V police car in Shenzhen and took turns smashing it with clubs.

Protesters took to the streets over a territorial dispute involving claims by China and Taiwan to sovereignty over a cluster of uninhabited islands northeast of Taiwan, known as the Diaoyu in China and as the Senkaku in Japan.

Anti-Japanese protests subsided during the weeklong national holiday in China last week. But the issue continues to simmer, with the Chinese government announcing that it would continue to send marine surveillance vessels to waters around the island that have been patrolled for decades by Japan’s Coast Guard.

Chinese fishing boats may also try to reach the islands after the holiday, as it has become politically more difficult for either the Chinese or Japanese governments to stop them.

Japanese automakers were struggling in China even before this autumn, said Yale Zhang, the managing director of Automotive Foresight, a consulting firm in Shanghai.

“Even without this political issue, the Japanese manufacturers made a lot of mistakes in areas like product planning,” he said.

With the exception of Nissan, Japanese automakers have been much slower to introduce new models than the three market leaders in China — General Motors, Volkswagen and Hyundai.

From January through July of this year, before the anti-Japanese protests started, all of the best-selling 10 models in China were produced by those three companies, Mr. Zhang said.

He added it was the first time in many years just three companies had produced all 10 top sellers.

The three leaders appear to have been gaining further market share at the expense of Japanese car makers this autumn, with Hyundai’s sales rising 9.5 percent last month from a year earlier and General Motors’ sales up 1.7 percent.

Volkswagen’s sales have also risen, but the company’s practice of releasing separate figures by brand and providing year-to-date figures instead of monthly figures makes it hard to say how much.

The attack that partially paralyzed the middle-aged man in Xi’an coincided with reports of damage to other Japanese-brand cars in that city, although no other comparable incidents of attacks on individuals.

Although better known outside China for its terra cotta warriors, Xi’an, in western China, is a hub of China’s weapons manufacturing industry and a center of nationalistic sentiment.

A bar on one of the city’s biggest avenues, several blocks from the city’s main crossroads, had a large, nationalistic sign on the front door a few years ago, when anti-Japanese sentiment was less prevalent elsewhere in China. The sign read, “No Japanese allowed.”

By contrast, Shenzhen is in Guangdong province, in southeastern China. The province has been the biggest market and biggest manufacturing center for Japanese cars in China in recent years, and has welcomed the factories of many Japanese companies, particularly in consumer goods industries like electronics.

Some political commentators have suggested that the protests in Shenzhen also reflected dissatisfaction with the Chinese government, which has allowed anti-Japanese demonstrations even while continuing to ban protests against its own policies.

nytimes.com

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