Diaoyu disputes benefits the west

by Guest on October 26, 2012

China’s national flag at a sales booth during an auto show in Hunan province.Domestic car sales rose amid continuing diplomatic tensions. He Dongping / For ChinaDaily

Domestic, other foreign ventures are beneficiaries

Plummeting Japanese sales in the wake of an ongoing diplomatic dispute were largely responsible for a sluggish September as China’s auto market declined 1 percent to 1.6 million units sold.

Combined Japanese-brand car sales for the month declined 41 percent to around 160,000 units, far lower than original estimates. That translates to 110,000 fewer sales and $2 billion in lost revenue.

All major Japanese brands were badly hurt: Nissan, Toyota and Honda had sales declines ranging from 47 percent to 39 percent. As a result, they are now cutting shifts or even halting production.

The 1.2 million units sold in the overall market meant no growth compared with the same month last year. Commercial vehicle sales only reached 400,000 million units, a decline of 6 percent year-on-year.

The projected total sales figure for the year based on September figures is now 18.46 million units, down 5 percent from the 19.4 million unit estimate last month.

Projected sales of passenger vehicles declined by 5.75 percent to 13.66 million units, while the rate for commercial vehicles declined by 2.73 percent to 4.8 million units.

On segment level, the performance of mini cars and subcompact cars remained weak in September, declining by 16 percent and 8 percent respectively.

Although SUV and luxury car sales continued to increase in September, the growth rate was significantly lower than the previous months.

But even amid the sluggish market, most non-Japanese automakers benefited from the decline of Japanese brands.

Great Wall’s sales surged by 77 percent in September on the strength of its SUV models.

Geely and JAC also achieved remarkable sales, increasing by 25 percent and 22 percent respectively.

German and US automakers – Volkswagen, BMW and Daimler, Ford and GM – all had impressive surges in September, especially Ford, which hit a record high.

Although the immediate damage is being felt by the Japanese, worsening relations between China and Japan is likely to drive away Japanese investment, the third-largest source of foreign direct investment in China.

Of greater concern in the short term is the heavy reliance of the Chinese auto sector on Japanese auto components.

Japanese companies supplied 58 percent of imported auto transmissions in the first eight months of this year. Further diplomatic tensions could disrupt the supply chain.

Taking the factors into account, our forecast for growth in 2012 passenger vehicle sales ha snow been revised down from 9.4 percent to 8.2 percent.

The writer is the director of Asia Pacific Forecasting at LMC Automotive. He can be contacted at JZeng@lmc-auto.com


One Response to “Diaoyu disputes benefits the west”

  • former cia agent says:

    not a bad investment for the westerners. pay some fake protestors a few bucks to stir up nationalism, and earn back millions in sales due to lost japanese business. rent a mobs are big business these days

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