Japan carmakers to cut China production by half: Nikkei

TOKYO Mon Oct 8, 2012 1:11am EDT

1 of 2. A visitor looks at a Toyota Motor Corp's Lexus vehicle displayed at the company's showroom in Tokyo September 26, 2012.

Credit: Reuters/Yuriko Nakao

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TOKYO (Reuters) - Japan's Toyota Motor Corp (7203.T), Nissan Motor Co (7201.T) and Honda Motor Co (7267.T) plan to slash production in China by roughly half, the Nikkei newspaper reported on Monday, as a territorial row between Asia's two largest economies cuts sales of Japanese cars in the world's biggest auto market.

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 a group of disputed islands in the East China Sea from their private owner.

Nissan will suspend the night shift at its passenger car factories in China and operate only during the day, the business daily said. Nissan has two passenger car factories in China, in Huadu and Zhengzhou, with two lines each. A Nissan spokesman declined to confirm the report.

Toyota and Honda plan to cut China production to about half normal levels by shortening working hours and slowing down the speed of production lines, the Nikkei said without citing a source.

A Honda spokeswoman said she was checking the report.

A Toyota spokesman could not confirm the details of the report, saying that plants in China were operating again as planned after the country's national holiday period last week and that production was taking placed based on market demand.

Toyota's China sales fell about 40 percent in September from a year before to about 50,000 cars, a senior company executive told Reuters last week. [ID:nL3E8L46W3] The firm is set to officially release its September China sales figures on Tuesday.

The Nikkei report did not say how long the output cuts would last.

SLOWING GROWTH

A spokeswoman for Mazda (7261.T), which halted production for two extra days in late September before it shutdown factories during the holiday season, said plants in China were operating again but declined to comment on details.

A spokesman for Suzuki Motor Corp (7269.T), which in late September had stopped one of two shifts that it normally runs in China ahead of the holiday season, said production was now back to what it was prior to the holiday.

Anti-Japan sentiment across China escalated last month amid a row over a group of uninhabited islets, known as the Senkaku islands in Japan and the Diaoyu islands in China, whose nearby waters are thought to hold potentially rich natural gas reserves. They have been under Japan's control since 1895.

Demonstrators vandalized properties of Japanese companies, including a Toyota outlet in the eastern city of Qingdao that was torched, in the latest flare-up in tensions that have smoldered since the end of World War Two.

The latest production adjustments come on top of general cutbacks the Japanese automakers had been making before the protests, as the Chinese economy grew at its slowest pace in more than three years in the second quarter.

But the dramatic drop in demand for cars made by Japanese brands, which had a combined share of roughly a fifth of China's passenger car market in August before the protests, has been an unexpected boon for foreign rivals.

South Korea's Hyundai Motor Co's (005380.KS) China sales climbed 15 percent to 84,188 vehicles last month, while Volkswagen's (VOWG_p.DE) Audi boosted sales by 20 percent, BMW (BMWG.DE) by 55 percent and Daimler's (DAIGn.DE) Mercedes-Benz by 10 percent.

(Reporting by Yoko Kubota, Kentaro Sugiyama; Editing by Richard Pullin and Alex Richardson)

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Comments (2)
Pterosaur wrote:
Japan has isolated itself politically in Asia because of its refusal to admit its war crimes.

Now Japan isolates itself from Asia’s, if not the World’s, auto market because of the revival of its militarism.

When will Japan ever behave correctly and constructively toward Asia?

Oct 08, 2012 2:08pm EDT  --  Report as abuse
Abulafiah wrote:
@Pterosaur

You Chinese are not that important. China accounts for only 16% of Japanese care sales, and as everybody else in the world is happy to buy Japanese cars the worst the Chinese can do is leave Japan with 84% of the current market.

They can survive that easily enough, but China will take $345bn+ per annum loss when Japan closes all their factories. Who will win that war – can you do the math?

Oct 10, 2012 11:38am EDT  --  Report as abuse
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