Car production in Japan in October fell 12.4% year on year to 792,166 units, down for the second straight month, according to the Japan Automobile Manufacturers Association.

The decline reflected the end of the government’s subsidy programme for eco-friendly vehicles, as well as the worsening relations between Japan and China over the Senkaku Islands which has led to a significant fall in sales of Japanese vehicles to China.

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Vehicle exports in October totalled 384,774 units, down 18.5%, with exports to China dropping 68.5% to 7,579 units. Shipments to Europe, which is still in economic crisis, fell 40.3% to 67,084 units.

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