1. Market Research
  2. > Top Headlines
  3. > Business
  4. > 2012
  5. > September
  6. > Japanese Automakers To Slow Production In China Due To Weak Demand

Japanese Automakers To Slow Production In China Due To Weak Demand

  • Currently 5/5 Stars.
  • 1
  • 2
  • 3
  • 4
  • 5
1 vote
(Photo: Stock.xchng)
(Photo: Stock.xchng)


  • Nissan, Toyota and Honda all see sales drops in China, South Korea
  • Some 30% of Nissan’s sales are in China; Toyota sees 17% and Honda is at 15%.
  • Japan set to lose market share in China to Germany

Japanese automakers are having a tough time in China, the world’s largest vehicle market, after anti-Japanese protests drive consumers to the competition.

In mid-September, protestors across China set fire to showrooms and damaged vehicles to show their discontent regarding a territorial dispute over islands in the East China Sea, which are controlled by Japan, but both China and Taiwan claim them.

Japanese car manufacturers Toyota, Nissan and Honda have seen demand fall and are cutting factory production in September and October, a time when they typically ramp up. Nissan, the largest Japanese carmaker in China, is closing factories three days earlier than for a planned holiday shutdown.

Japanese Brand Car Sales Down In China

Prior to the protests, sales in China had already started to decline as the Chinese economy slows. In August, Nissan saw sales fall 8.9% from 2011, while Toyota saw an 18% decrease and Honda dropped 10%.

A similar dispute with South Korea over islands have caused sales of Japanese automobiles to drop there also. According to the Korea Chamber of Commerce and Industry, sales of Japanese vehicles fell 12%.

An analyst with Fukoku Capital told Business Week: “If the Chinese, Koreans and maybe the Taiwanese are not willing to buy Japanese cars, Japanese automakers will suffer, and so will their share prices.”

Currently, some 30% of Nissan’s sales are in China, and it manufactures cars in China with Dongfeng Motor Corp. Meanwhile, Toyota sees 17% of sales from China and Honda is at 15%.

Japanese automakers had been relying on China for sales after a subsidy for fuel-efficient cars expired and sales in Japan have stagnated.

Germany To Grow Market Share in China

China’s Passenger Car Association predicts Japan will lose its market share in China to Germany for the first time since 2005. Germany’s market share is expected to increase by 22.5%, while Japan’s will fall by 22% in 2012, the association says.

Japan is also losing ground to American and South Korean manufacturers. According to data from the China Association of Automobile Manufacturers, Germany, US and South Korean manufacturers saw sales rise by 10% in September.

Dealerships selling competitor brands have launched marketing campaigns designed at taking advantage of anti-Japanese sentiment and luring in new customers.

Key Statistics - Automotive Manufacturing in China (source: MarketLine)

  • In 2011, the automotive manufacturing industry in China had revenue totaling $280 billion. For the timeframe 2007-2011, this represents a compound annual growth rate (CAGR) of nearly 15%.
  • Between 2007-2011 the industry’s consumption volume increased at a CAGR of 7.3%. In 2011, it reached a total of 45 million units.
  • For the five-year period 2011-2016, the automotive manufacturing industry in China is predicted to decelerate to a CAGR of 10.5%. By the end of 2016, the industry is expected to be valued at nearly $461 billion.

By Melina Druga for
Melina Druga is an author and freelance journalist. You can follow her on Twitter @MelinaDruga .

Share this news with a friend or colleague



Browse our categories

Browse our archives

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.