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Toyota China sales tumble in islands row

Photo:  Reuters

Toyota Motor Corp's China sales fell about 40 percent in September from the year before, while those of rivals such as Hyundai and BMW jumped, underscoring how badly Japanese brands have been hit by a territorial row between the two countries.

Showroom traffic and sales have plunged at Japanese car makers since violent protests and calls for boycotts of Japanese products broke out across China in mid-September over the Japanese government's purchase of Diaoyu islands in the East China Sea.

A prolonged sales hit of this scale could threaten profit forecasts at Toyota, Nissan Motor Co and others as China, the world's biggest car market, makes up a bigger portion of their global sales.

Toyota sold about 50,000 cars in China in September, a senior company executive told Reuters on Friday, speaking on condition of anonymity. That would be down from about 86,000 in September 2011 but better than the figure reported earlier by Japan's Yomiuri newspaper, which said sales halved from the 75,000 sold in August.

The plunge in demand for Japanese vehicles has boosted other foreign brands, with South Korea's Hyundai Motor Co saying on Friday its China sales climbed 15 percent to 84,188 vehicles last month.

Toyota declined to confirm the number, saying it would announce its Chinese sales for September on Tuesday.

As demand evaporates, Toyota, Nissan, Honda Motor Co and others have been forced to cut back production in recent weeks in a slowing, but still promising Chinese market.

A source told Reuters late last month that Toyota's production cutbacks could extend through November, a move that would almost certainly put the company's goal of selling 1 million cars in China this year out of reach.

"I would say it's almost impossible now," the executive said, blaming the wave of anti-Japan sentiment that has swept the country.

He added, however, that sales showed signs of recovery towards the end of last month, especially over the final weekend, providing some hope for an early comeback.

Japanese car makers have been the most visible losers, although there have been signs of the tensions affecting other sectors, with All Nippon Airways Co Ltd (ANA) saying late last month it had seen a wave of cancellations on Japan-China routes.

On Thursday, Mazda Motor Corp said its China sales tumbled by more than a third last month from a year earlier, providing the first concrete numbers to point to Japanese automakers' troubles in China.

A Nissan executive said on Friday he expected the protests to have affected its Chinese sales in September, but reiterated the car maker's stance that it would not alter its strategy there.

Shares of Toyota and Nissan were down on Friday against a marginal uptick in the broader Tokyo market.

Nissan, whose exposure to China is the largest among Japan's top three automakers at 27 percent of projected global sales, fell 1.5 percent. Toyota was down 1.1 percent. The Topix index rose 0.2 percent.


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