By on October 4, 2012

Japanese carmakers are worried about their sales in China after Japanese cars were smashed and dealerships torched during large scale anti-Japanese riots in China last month. As a first indicator that Japanese cars may be falling out of favor in China,  Mazda reports via Reuters that September sales in China dropped 35 percent.

Mazda’s much larger rivals Toyota, Honda and Nissan have not yet released their September car sales for China. Chinese sales reports for September/October need to be carefully analyzed as the impact of the Mid Autumn Festival holidays can significantly distort year-on-year comparisons. In 2011, the festival started officially on September 12, this year, it started on September 30.

Japanese carmakers have scaled back production at their Chinese joint ventures, extended the October holidays and went from two shifts to one. Publicly, they hope that this will soon blow over. Privately, they are worried that consumer sentiment may have changed. Similar, but smaller scale demonstrations in 2005 and 2010 were mostly for foreign consumption. This year’s demonstrations for the first time did resonate with the public. Driving a foreign car is a sign of achievement in China. Driving a Japanese car currently can mean a loss of face at the minimum, or a loss of the car if an enraged mob comes down the street.

Also in September, Audi’s sales rose 20 percent to 35,512 vehicles in China, Reuters reports. BMW is up 55 percent in September, Mercedes is up 10 percent. This could be an indicator of bigger shifts to come: German brands recently had overtaken Japanese brands in China, a change that is likely to accelerate.

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3 Comments on “Mazda Sales Crash In China, Germans Soar...”

  • avatar

    And the American brands?

  • avatar

    The country that has been ‘ham-fisted’ in the handling over this territorial issue is not Japan but rather China.

    The image of Deng Xiaoping’s “peaceful rise” of China has been severely eroded with recent events. Increasingly, the views from around the world is that China’s assent as a global player is not beneficial to their neighbours. China has territorial disputes with not just Japan, but S. Korea, Philippines, Malaysia, Brunei, Taiwan, Vietnam, and India.

    China is now seen as a “trade bully” (WSJ):

    Another recent article claiming the same thing:

    The best example is Norway’s trade ‘punishment’ for a Chinese dissident,Liu Xiaobo, getting the Nobel Peace Prize. Norwegian salmon has faced new inspection requirements, causing imports to fall by 60% last year while salmon imports jumped overall. Obviously, Norewegian government does not control the Nobel Prize committee; which is a private non-governmental organization.

    China’s greatest fear is that the developed world (US, Europe, & Japan) will try to contain them. Stop their economic and military growth.

    All this at the worst time for China. Their economy is grinding to a halt, they have a housing bubble, inflation, labour unrest, manufacturing is dire, and they have a leadership change.

    Worse, a lot of multinationals are fleeing China to S. East Asia due to labour costs. Now, when you throw in, risks of Chinese Communist Party retaliation for political events. That’s a risk, and risk is a cost.

    Its no coincidence that Japan is investing $18 Billion in developing Myanmar (the next cheap labor country):

  • avatar

    Dammit – just when Mazda could most use the sales.

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