* Island row taking toll on sales for Japan automakers
* Mazda down 35 pct in Sept but Audi up 20 pct
* Other Japan automakers have not released Sept figures yet
* Nissan and Toyota have curbed production
By Fang Yan and Fayen Wong
BEIJING/SHANGHAI, Oct 4 Mazda Motor Corp
said on Thursday its China sales tumbled 35 percent in
September from a year earlier, the first concrete numbers to
point to problems faced by Japanese automakers in the wake of a
territorial row between the two countries.
Violent protests and calls for boycotts of Japanese products
broke out across China in mid-September after Japan bought two
of the East China Sea islands, known as the Diaoyu in Chinese
and the Senkaku in Japanese, from their private owners.
The tensions, which came as the two countries marked the
40th anniversary of diplomatic relations, have started to affect
a wide variety of Japanese firms, and have prompted some foreign
investors to allocate funds away from Japan amid fears that a
lasting reconciliation could be a long way off.
China's state-owned media have warned Japan that it could
endure another "lost decade" of economic stagnation should
Beijing resort to economic retaliation if the dispute festers.
Among other Japanese automakers, Nissan Motor Co
and Toyota Motor Corp have been forced to curb
production after arsonists badly damaged their stores in the
eastern port city of Qingdao -- a situation that stands in
sharp contrast to other foreign automakers that had been adding
capacity until recently.
Mazda, which operates a three-way car venture in China with
Ford Motor Co and Chongqing Changan Automobile Co Ltd
, said it sold just 13,258 cars in the world's
biggest auto market in September. In August, it sold 17,497
cars, a milder slide of 11 percent from a year earlier.
"(Japanese automakers) lost a lot of selling days ... There
is no doubt that Mazda's sales setback was a result of this very
complicated situation between China and Japan," said Yale Zhang,
head of Shanghai-based consulting firm Automotive Foresight.
Naoto Oikawa, a Mazda spokesman based in Shanghai, said
Mazda's sales in China have been contracting every month since
"I am sure there was some impact, but it's difficult to say
how much of the sales slide we saw last month was due to
anti-Japan protests," he said.
Other Japanese automakers have yet to release their
September sales figures for China but other foreign brands are
not feeling their pain. Volkswagen's premium brand
Audi increased sales in China by 20 percent to 35,512 vehicles
For the year to date, Mazda's sales are down 6 percent.
China is Japan's largest trading partner. In 2011, their
bilateral trade grew 14.3 percent in value to a record $345
billion. Exports to Japan, however, make up less than 10 percent
of China's total.
Standard & Poor's warned this week that while Japanese
firms' credit ratings were not likely to suffer much from the
dispute at the moment, that could change.
"If the political confrontation drags on and further worsens
ties between both countries, it may hurt Japan's macro economy
and affect the credit quality of rated Japanese companies on a
large scale," said Standard & Poor's credit analyst Naoko
Airlines have also suffered, with All Nippon Airways Co Ltd
(ANA) saying that 40,000 seat-reservations were
cancelled for flights between Japan and China from September to