Sales of Japanese cars falling in China over the Senkaku (Diaoyu) Islands controversy

Boycott of Japanese cars by Chinese buyers over the controversy regarding ownership of oil rich Senkaku (Diaoyu) islands may hurt domestic engineering firms and dealerships of Japanese car manufacturers in China.

Japanese auto manufacturers like Toyota, Mazda, Nissan, Honda and Mitsubishi have been the worst hit due to the switching over. Sales of these companies took a blow of about 35-50% in the month of September, 2012.

It is important to know here that the Japanese car manufacturers that we have talked about above have its parts manufactured in China and assembled there also. Once the cars have been manufactured, they are dispatched to the dealerships within China owned by Chinese where Chinese sales staff themselves sells these cars.

Janet Lewis who works as analyst at the Macquarie Capital Securities in Hong Kong has said, “In many ways, reduced sales of Japanese brand vehicles in China actually hurts Chinese companies,” She also said, “There is a definite impact in China.”

It may difficult to quantify the exact impact of the boycott on these dealerships until the next quarterly financial statements are out. Till then all you can do is speculate the decline in sales happening in China to the overall sales figures of its auto manufacturers reported by Japan.

John Zheng, Director of Auto Industry consultant, LMC Automotive based in Shanghai has made his point saying that it’s going to be the dealerships that are going to face majority of the heat of this boycott.

He said, “Dealerships have already suffered a lot in the big cities,” and “In many cases, they’ve already paid for the cars on their lots. If they are unable to sell them, that’s out of their pocket, not Toyota’s or Honda’s.”

The reason why these cars have been targeted by the protestors is cause of their understanding in the public as the dominant category in overall Chinese exports that take place each year. Another incident took place in industrial city of Xi’an where a man was beaten and then dragged by a Japanese car leaving him paralyzed.

Though protests have stopped since the incident took place but the sale of Japanese cars had not picked up since then and still continues to be a cause of concern. However some experts are also of the view that nationalist sentiments may be playing strong on people’s psyche in China. Another critical sentiment going strong is that of destruction of property of people who will buy these cars against mass decision.

Source: CNN Money

Photos: AFP/ Getty Images

Published by Bhavesh Kumar

A multi-talented professional with diverse experience spanning across Advanced statistical analysis,Python programming with NumPy, pandas, matplotlib, Seaborn, Tableau, Machine Learning with stats models and scikit-learn, Deep learning with TensorFlow, journalism (digital and broadcast), management consultancy and documentary filmmaking. Worked for the leading international news agencies on feature stories, videography, scripting, programming and editing broadcast news. A creative and analytical mindset focused on executing new-age strategic communication initiatives with all its corresponding elements (clear and coherently written key messages, marketing strategy and predictive analytics) to ensure effective target audience impressions. Also, worked on several primary and secondary market research projects (Market Feasibility Study) for businesses looking for actionable insights.

One thought on “Sales of Japanese cars falling in China over the Senkaku (Diaoyu) Islands controversy

  1. China must support and enhance the economic boycott by Chinese citizens. China also
    should support the continuous landing of Chinese onto the islands. In addition, the condition of the Japanese in China should depend on the condition of the resolution of Diaoyu Islands.

    Must not let financial interest from privileged individuals affects the national integrity. Japan must continuously pay economic cost for her aggression others China will be raped by Japan again.

    It is only a show to have patrol boats around the islands. The financial interest of powerful individuals over Japanese trade should not over ride national integrity. Since Diaoyu Islands have been part of China for more than five hundreds years, if China cannot protect her national territory integrity, China should change the words in her national anthem.

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