Toyota Sales in China Plunge 40%; Japan Carmakers to Cut China Production by Half

In the wake of rising anti-Japanese sentiment in China fueled by a dispute over islands in the East China Sea, sales of Japanese cars in China have plunged.

In response Japan carmakers to cut China production by half.

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.

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. The firm is set to officially release its September China sales figures on Tuesday.

Please see Is China Burning? for more details regarding the dispute over islands in the East China Sea. Unfortunately, the bitter feud seems highly unlikely to go away any time soon.

Moreover, that feud is going to impact Japan's current account surplus. Already Japan has gone from trade surplus numbers to deficits. The current account (of which trade is the largest component) will follow.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com