Both Mitsubishi and Subaru have slashed their second fiscal half year sales targets in Japan by over 50% amid the continuing territorial dispute over the Senkaku/Diaoyu islands in the East China Sea.

Mitsubishi has cut its forecast from 47,500 units to 20,000 for the fiscal year ending 31 March, 2013. Fuji Heavy, maker of Subaru cars and SUVs, has lowered its forecast to 13,700 from 34,000.

Mitsubishi president Osamu Masuko said the company could not be optimistic about sales in China until next March.

"We cannot be optimistic (about sales in China) until March next year."

Fuji Heavy is one of the few manufacturers not to have a joint venture partner in China for local assembly. Its president Yasuyuki Yoshinaga said the company was still willing to launch production in China “if chances arise”.

In the meantime, it plans to lower prices and improve finance deals at its dealerships in the country, he said.