Toyota, Nissan and Honda plan to halve production in China because a territorial row between that country and Japan has affected sales of Japanese cars in the world’s biggest car market, media reports on Monday (8 October) said.
Reuters, citing Japanese business daily Nikkei, said Nissan would suspend the night shift at its passenger car factories in China. The automaker has two passenger car factories in China, in Huadu and Zhengzhou, with two assembly lines each. A Nissan spokesman declined to confirm the report to Reuters.
Toyota and Honda plan to cut China production to about half normal levels by shortening working hours and slowing line speed, the Nikkei said without citing a source.
Nissan would not confirm the report. A Honda spokeswoman told Reuters she was checking the report and a Toyota spokesman could not confirm the details of the report, saying that plants in China were operating again as planned after the country’s national holiday period last week and that production was taking placed based on market demand.
Reuters noted that sales have plunged at Japanese car makers since violent protests and calls for boycotts of Japanese products broke out across China in mid-September over the Japanese government’s purchase of a group of disputed islands in the East China Sea from their private owner.
That prompted the Japanese JVs to make temporary production cuts ahead of the recent week-long national holiday in China which ended on Sunday (7 October).
Japanese automakers have also cut production of China-bound vehicles in Japan.
Toyota’s China sales fell about 40% year on year in September to about 50,000 cars, a senior company executive told Reuters last week. The firm is set to officially release its September China sales figures tomorrow (9 October).
The Nikkei report did not say how long the output cuts would last, according to Reuters.
A spokeswoman for Mazda, which halted production for two extra days in late September before it shut down factories during the holiday season, told the news agency plants in China were operating again but declined to comment on details.
A spokesman for Suzuki, which in late September had stopped one of two shifts that it normally runs in China ahead of the holiday season, said production was now back to what it was prior to the holiday.
Anti-Japan sentiment across China escalated last month amid a row over a group of uninhabited islets, known as the Senkaku islands in Japan and the Diaoyu islands in China, whose nearby waters are thought to hold potentially rich natural gas reserves. They have been under Japan’s control since 1895.
Demonstrators vandalised properties of Japanese companies, including a Toyota dealership in the eastern city of Qingdao that was torched, in the latest flare-up in tensions that have smouldered since the end of World War Two.
The latest production adjustments come on top of general cutbacks the Japanese automakers had been making before the protests, as the Chinese economy grew at its slowest pace in more than three years in the second quarter, Reuters noted.
However, the dramatic drop in demand for cars made by Japanese brands, which had a combined share of roughly 20% of China’s passenger car market in August before the protests, has been an unexpected boon for foreign rivals.
Hyundai Motor China sales climbed 15% to 84,188 vehicles last month while Volkswagen’s Audi boosted sales by 20%, BMW by 55% and Daimler’s Mercedes-Benz by 10%.