China island row squeezes Japan car production

China island row squeezes Japan car production

TOKYO - Three of Japan's biggest carmakers said Thursday that output in China slumped again last month as they continue to feel the effects of a bitter territorial dispute between Tokyo and Beijing.

Toyota, the world's best-selling auto maker in the first six months of the year, produced 61 per cent fewer cars in China year-on-year in October, it said, while Nissan cut output by 44 per cent and Honda by 54 per cent.

The figures follow earlier data showing all three companies had seen large falls in sales in China over the month as a consumer boycott of Brand Japan lashed two-way trade.

Although in percentage terms Nissan was the least badly affected of the three, its exposure to China is greater, meaning its absolute production fell further.

Toyota made just 30,600 vehicles over the month, Honda produced 26,302 and Nissan 61,360.

Last month, Nissan CEO Carlos Ghosn told the Financial Times his company would think twice before making new investments in the country.

"Certainly beyond what we have decided, before going for further decisions in China, we will be very careful in assessing how much of an impact (the political situation) has on consumers' minds," Nissan's top executive said.

Beijing and Tokyo have disagreed for decades over the sovereignty of an uninhabited archipelago in the East China Sea.

The Senkaku Islands are controlled by Japan, but claimed by China, which calls them the Diaoyus.

The Japanese government's move to nationalise three of the islands in September sent relations tumbling, with sometimes violent protests erupting in cities across China.

Japanese businesses were frequently targeted in demonstrations commentators said must have had at least tacit state backing. Factories and shops were shuttered either because of actual damage or because of threatened violence.

Numerous Japanese cars were wrecked by mobs, another factor that could have led to a fall in sales.

But despite the gloom from China, Toyota and Honda logged rises in total overseas production, with Toyota seeing a 13 per cent uptick in output at plants excluding those in Japan. Honda's overseas production jumped 20 per cent.

Nissan said its overseas production total fell 1.7 per cent.

All three companies saw output fall in Japan.

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