Japanese car makers sticking with China market despite sales slump

Japanese-brand car makers will not give up on the Chinese market despite tumbling sales amid Beijing and Tokyo’s dispute over the Diaoyu Islands.

Yao Yiming, executive vice president of Guangqi Honda Automobile Company, said, “Our strategy to tap into the Chinese market has remained unchanged despite the flagging sales prompted by the current Sino-Japan relations.”

The company is a joint venture between the Guangzhou Automobile Group and Japan’s Honda Motor.

“Next year, three types of our new vehicles will hit the Chinese market,” he said. “During the next two years, we will debut a new SUV specially tailored for Chinese consumers.”

Yao made his comments on Saturday at the sidelines of the ongoing 10th Guangzhou International Automobile Exhibition, which opened on Friday in the south China city of Guangzhou.

“We need to make full use of the exhibition to boost our sales,” he said.

Almost all major Japanese car brands can be seen at the exhibition.

Japanese brands such as Toyota, Honda and Nissan brought their latest models to the annual event, one of China’s three major auto exhibitions.

Toyota and its Chinese joint ventures displayed 46 cars in an area of 4,500 square meters, according to organizers.

The presence of Japanese auto makers proved speculation that few would show due to a lack of confidence in China’s market as wrong.

Their participation is a stark contrast to last month’s auto show in northeast China’s Shenyang City, when Japanese manufacturers were asked to skip the event by organizers.

But experts said it is still too early to say that the prosects for Japanese brands in China is improving.

Li Youhuan, an economist with Guangdong Provincial Academy of Social Sciences, believed there is a long way to go before Japanese brands have fully recovered.

“In quite a long time, they will still face a tough Chinese market,” he said.

“The real recovery of sales of Japanese-brand vehicles hinges on the recovery of Sino-Japanese relations,” Li added.

Sales have been flagging in the country since Japan’s illegal “purchase” of the Diaoyu Islands strained Sino-Japanese ties in September.

The “purchase” prompted angry Chinese consumers to shun Japanese car brands.

In October, Japanese-brand passenger car sales dived 38.2 percent month-on-month and 59.4 percent year-on-year.

In contrast, passenger car brands from Germany, U.S., the Republic of Korea and France all posted more than 20-percent growth in sales on a yearly basis in October.

Yao said the sales volume of Guangqi Honda Automobile Company in China dived over 40 percent in September and October, forcing the company to revise its previous sales plan of 400,000 vehicles for the year.

“But judging from the orders and inquiries our dealerships have received since the beginning of November, there has been a favorable turn in our car sales,” Yao said.

The businessman, however, said he cannot be sure when the sales volume will recover to previous levels because it takes time to repair the dented confidence of Chinese consumers in Japanese brands.

They are hesitant about buying a Japanese-brand car which could be targeted if Sino-Japanese ties worsen.

“I fear that the tense Sino-Japanese relations will force the Japanese car makers to cut back their business in China, which will bring problems of after-sale maintenance,” said Jiang Shaohua, a Guangzhou resident, at the exhibition.

Xinhua