Japanese car firms’ China sales declines are slowing

Japan’s automakers saw a slow recovery of sales in China in December as buyers trickled back to showrooms lured by generous incentives, and as the bruising effects of a territorial dispute between the two countries waned.

Nissan Motor, the largest Japanese vehicle maker in China, saw the decline in its Chinese sales narrow to 24 per cent in December from 29.8 per cent in November and 41 per cent in October.

Honda Motor Co., Toyota Motor Corp. and Mazda Motor Corp. reported declines of 19.2 per cent, 15.9 per cent and 26.4 per cent, respectively, slower rates of declines than in previous months.

“Japanese cars have a large following in China because of their styling and fuel economy. Sales would continue to improve as long as the island dispute does not deteriorate, but it could take a while for them to recoup their market share,” said Sheng Ye, an analyst with industry consultancy Ipsos.

Some Chinese consumers have avoided Japanese cars since violent anti-Japan protests last September after Japan nationalised two East China Sea islands. China claims the islands as its own territory.

In a bid to win back the hearts and wallets of Chinese drivers, Japanese carmakers have compensated owners for damage and injuries during the protests.

Nissan’s China venture also offers a new car to any buyer returning a vehicle over a quality issue within seven days of purchase and with mileage below 1,000 kilometres. None of the carmakers has said how much the incentives have cost them so far.

Japanese firms’ collective share in China’s passenger car market rose to 11.7 per cent in November from 7.6 per cent in October, though it was still lower than 19.4 per cent at the end of 2011. December market share data is not available yet.

However, growth for all automakers in China is expected to be tepid this year as authorities in China look for ways to curb car buying to help ease the worsening traffic gridlock, while Japan-China tension will continue to hold back Japanese makers.

Last month, Nissan sold 90,400 vehicles in China, bringing its 2012 sales to 1.18 million, down 5.3 per cent year on year. The figure includes trucks and commercial vehicles.

Full-year sales at its venture with Dongfeng Motor Group Co. came to 773,000 vehicles, missing its 1 million annual sales target.

Toyota sold a total of 840,500 cars in China last year, down 4.9 per cent from 2011. Honda sold 598,577 cars in 2012, down 3.1 per cent from 2011.