By on November 12, 2012

We have followed the effects of the Chinese boycott of Japanese products with great interest, especially when it came to cars. Encouraged by very strong sales of German brands, we declared them the winner of the war of words. It looks like we may have made a mistake. At least if we can trust official Chinese statistics.

Market share by country, passenger vehicles, w/o SUV

Market Share Passenger Vehicles w/o SUVs
Jul Aug Sept Oct
Japan 21.1% 20.0% 13.2% 9.0%
Germany 25.1% 25.8% 24.1% 27.0%
U.S.A. 16.0% 16.6% 17.1% 17.0%
S-Korea 9.8% 10.3% 10.7% 10.7%
France 3.7% 3.7% 4.6% 4.7%
China 24.3% 23.5% 30.3% 31.3%
Source: CAAM

The China Association of Automobile Manufacturers CAAM publishes monthly sets of data covering the auto business in China.

The chart, based on CAAM numbers, depicts the rapid fall of formerly market-leading Japanese brands to levels just a little bit higher than French brands. As drastic as it is, it is not surprising in light of news that major Japanese automakers  lost nearly half of their sales in China, Cui bono?  According to CAAM data, the market share of Chinese passenger vehicle brands (ex SUVs) jumped from 23.5 percent in August to 30.3 percent in September. We chose to ignore this, because in September, the market share of Chinese brands always jumps, only to resettle later.

In October however, the market share of Chinese brands climbed further to 31.3 percent. That while the market share of all Japanese brands in China careened from 21.1 percent in July to 9 percent in October.

Sure, German brands are up strongly, from 25.1 percent in July to 27 percent in October. However, according to these data, German brands actually saw a slight dip of market share in September. The market shares of U.S., South Korean, and French brands are up moderately.

And now the same exercise for passenger vehicles including SUVs.

Market share by country, passenger vehicles, w/ SUV

Market Share Passenger Vehicles w/ SUVs
Jul Aug Sept Oct
Japan 19.8% 18.6% 12.2% 7.6%
Germany 20.4% 20.8% 19.3% 21.6%
U.S.A. 11.8% 12.3% 12.8% 12.5%
S-Korea 8.7% 9.1% 9.7% 9.7%
France 2.6% 2.7% 3.3% 3.3%
China 36.7% 36.4% 42.7% 45.1%
Source: CAAM

Market observers we asked don’t think it is plausible that Chinese Toyota buyers cross-shop Chery or Geely. But you never know. Maybe, the anti-Japanese fervor translated into a strong pro-Chinese brand sentiment. If this could prove true, it could spell the beginning of the end of the Chinese paradise for foreign brands. We keep an eye on these data and see whether the trend solidifies.

Note:  Chinese domestic brands mostly are independently owned, whereas joint venture  partners of foreign makers usually are  state owned enterprises.

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22 Comments on “Official Statistics: Chinese Brands Big Winner Of Anti-Japanese Row...”


  • avatar
    blowfish

    need to borrow a quote from our man of 70s Archieeeee Bonkers ” Sayonara Sharpenese ”

    oh well they’re the author of their own demise, buying that little island is probably as bad as hanging a dead albatross around one’s neck!

    a song for Noda, as I am not trying to rub salt onto his wound,
    i can’t honestly say hope is around the corner. Good luck buddy!
    or something our Pisano friend Sergio shall be sending to Ghosn et al, wish well Renault & Nissan from the heart of his bottom.

  • avatar
    th009

    Looking at year-over-year data for October, which I find more relevant than month-to-month variations we see …

    Chinese brands: +14.9% October, -0.7% YTD
    German brands: +31.7% October, >+10% YTD
    Japanese brands: -33.7% October, -5.5% YTD
    US brands: +18.0% October, >+10% YTD
    Korean brands: +21.6 October >+10% YTD

    Looks like the Chinese brands are having a good month (probably benefiting from the Japanese backlash, as noted by Bertel), but the year has otherwise been lacklustre for them.

    This is assuming I got things sorted correctly from CAAM’s press release with the help of Google and Bing Translate!

    http://www.caam.org.cn/xiehuidongtai/20121109/1605081759.html

  • avatar
    blowfish

    whereas joint venture partners of foreign makers usually are state owned enterprises.

    i suppose initially the state ownership will perceived as suffering greatly, losing production= decrease revenue, but no soon enuf when the japs start to get edgy they may have to find a final solution as cash burn & non performing loans do have its bottom line, either partner will have to find a family lawyer digging out the pre-nuptial agreement as to see who gets the patek phillipe, house , couch, mountain bike and most likely the lawyers will choose the prancing horse or Roller.
    i guess soon enuf noda will spell nadir in the white speaking world.

  • avatar
    28-Cars-Later

    Other than perhaps Volkswagen picking up share as well, I think from the outset of this the Chinese brands were destined to grow in the fallout with Japan. The question really becomes, is this a permanent trend in China, or in a year or so to the Japanese brands regain their previous volume?

    • 0 avatar
      blowfish

      well greatly depends how amicably the islands being settled.
      the worse scenario shall be a war but nobody in their sane mind will want this to happen.
      failing that an economic war is waging at the moment,
      either side is not budging at all, as we know it also how in the end the pie get sliced, but Noda really did under estimated his opponents, thought about buying the island will settle the dispute legally.
      To him the purchase move is almost like buying an known hot stolen item and pretend it to be 100% legitimate and wore it in a parade? He should have left it alone, since is not going no where in a hurry.
      with so much trade and such a convoluted relationship with Middle kingdom, he should have let it cool and negotiate with MK secretly, rather than introducing the pent up hostile petty bourgeois into the equation.
      This also making it difficult for the ruling junta in MK to tighten the leash again. They can only let time to take its course.
      Uncle Sam is not going to take side so easily as her trade & bonds with MK is even more convoluted, so is it wise to join any of the disputed party?
      There’re also bringing up a lot of buried pain 60 yrs ago in MK ie Rape of Nanking, which any prudent folks would try to avoid. Or have we heard of Japanese celebrate Dec 7th ? is not funny at all. God bless all of us.

      • 0 avatar
        L'avventura

        China has been in 23 territorial disputes since 1949, 6 of them China has used military force. Invasion of Tibet, its war with India, Taiwan and Vietnam are examples. This year they’ve moved military ships into disputed islands near the Philippine. The chance of military escalation from China’s side is very real:

        http://online.wsj.com/article/SB10001424052970203922804578082371509569896.html

        These territorial disputes will not be settled any time in the near future (there is too much oil under there). China’s disputes are not just with Japan, but pretty much all its Asian neighbours, they also have land the size of Greece in dispute with India. These are all flare up points.

        Let’s keep in mind, this is actually a fight between the US & China. Japan can’t constitutionally use any military force, even if its attacked, even in self-defence, without US involvement. US is also supporting countries in South East Asia and India against China. Its part of a US containment strategy of China, their ‘pivot to Asia’.

        This is part of the risks of doing business in China for every foreign business, not just the Japanese; as the Filipinos and Norwegians have recently learned. ANY political dispute with China can and will be met with retaliation. This is a hard lesson learned by the Japanese, who have already started to move elsewhere for manufacturing. In the last few week alone Toyota announced expansion plans in Thailand, Nissan also in Thailand, Honda in Malaysia, and Toyota again in Indonesia.

      • 0 avatar
        el scotto

        Nope, no bombings, no war. Both China and Japan have McDonalds. China has Wal-Marts also. If your country doesn’t have a McDonalds, I’d be nervous. The Balkans, Iraq, Afghanistan? No McDonalds, just saying.

      • 0 avatar
        28-Cars-Later

        I can see it now: The McDonald’s Peace Accords.

      • 0 avatar
        Lorenzo

        Well, that’s how the US will get them to the table. “Settle your differences or no more Big Macs for either of you!”

      • 0 avatar
        L'avventura

        Jokes Aside, China is expected to overtake the US as an economy within the next 4 years, and at most 20 years, depending on the growth rate. The OECD expects China to overtake the US by 2016:
        http://www.businessinsider.com/a-new-meaning-to-four-more-years-2012-11

        Moreover, China is developing into a strong military power. They are nowhere near the military might of the US now, but in 20 years who knows. The US is scaling back their military budget while China is cranking up theirs. China has the chance to become both a economic and military superpower to rival or surpass the USA.

        The Senkaku/Daiyou islands also hold a strategic significance for the US military as its located adjacent to Taiwan and encapsulates China within the ‘first-island chain’. This was the primary reason the US returned the islands to Japan in 1971 instead of Taiwan or China. If a military conflict were to occur over Taiwan these islands will be crucial in defending it against China. If they fell into Chinese hands it allows China to penetrate the first-island chain and project its military across the Pacific. China is busy building their blue-water navy.

        So there is no wonder why the US is trying to mitigate Chinese influence in Asia. Fortunately for the US, these Chinese-Japanese conflicts, as well as South China Sea and Sino-Indian conflicts, play to the US’ advantage as it pushes Asian countries futher under the US military and economic umbrella.

      • 0 avatar
        mkirk

        I could have sworn that Iraq had a McDonalds at one time. I do know there was a building in downtown Baghdad that had the statues of Ronald McDonald, Grimace, and the Hamburgular on the roof however as of 2010 it was not selling any burgers.

  • avatar
    blowfish

    as the Filipinos and Norwegians have recently learned
    not sure how Norwegian got involved, perhaps was the Nobel award.

    The WSJ article is pretty interesting.

    Also the Japanese had chosen some of the invasion of China’s date as signing ceremony.
    So they deliberate to inflame the situation.
    Should the mobs were not involved, probably the cars sales wouldn’t suffer anythign at all.

    • 0 avatar
      L'avventura

      The Norwegians were punished by China because they gave the Nobel Peace Prize to imprisoned Chinese writer Liu Xiaobo (which called for the Chinese people’s freedom and democracy). Obviously, the Nobel Prize is given out by a private non-governmental organization and not the Norwegian government, but that is not a distinction China was willing to make.

      Last year, Norwgein salmon exports fell 60% even while the salmon import market in China surged:
      http://www.seafoodsource.com/newsarticledetail.aspx?id=15891

      Filipino fruits and agricultural products destined for China has been held up in customs until they rot during the military conflict Scarborough Shoal conflict earlier this year.

      The Japanese government made a miscalculation, they originally intended to stop Tokyo mayor Ishihara from purchasing the disputed island and developing it by making a lighthouse and coast guard station. By out-bidding them and leaving it untouched, they thought would reduce conflicts and keep the status quo, the Chinese didn’t see it that way.

      The message is clear; don’t mess with the Chinese government. They are willing to use any and all means necessary to enforce their interests.

      As the South China Morning Post writes, while the economic impact in the short term will be felt by Japan, in the medium-long term it will be much more negative to China as Japanese companies make an exodus from China, sapping investment and jobs in an increasingly fragile labour market:

      http://www.scmp.com/business/economy/article/1068213/mad-economic-cost-japan-and-chinas-sovereignty-row

      Let’s also keep in mind, as the BBC points out, China, like Japan in the late-80s, is likely in a massive bubble economy that may burst at any time:

      http://www.bbc.co.uk/news/business-19948730

      • 0 avatar
        mkirk

        If China is in fact in a bubble then things stand to get interesting when that bubble bursts.

      • 0 avatar
        L'avventura

        @mkirk

        The unique aspect of China is that they have total control of their economy. The currency, the banks, the media, politics, every major company; everything. SOE(state-run enterprises) account for upto 60% of China’s GDP. If the bubble bursts the tools afforded to them are immense. They can do things to prevent any negative fallout that other countries can only dream to do.

        But let’s not kid ourselves of the scale of China’s bubble. Its not just a massive housing bubble its multiple bubbles within bubbles…

        China may be hiding the “mother of debt-bombs” (maybe upto $4 Trillion held by local governments):
        http://thediplomat.com/2012/09/10/are-chinese-banks-hiding-the-mother-of-all-debt-bombs/

        China also has a shady Shadow Banking system:
        http://www.businessinsider.com/complete-guide-to-chinas-shadow-banking-system-2012-7

        Again, as China controls so much of its economy, we don’t know how this will play out. They may just print/spend their way out of any bubble, take a big hit in inflation and carry on like nothing happened. Its really uncharted territory.

  • avatar
    blowfish

    i did read somewhere Japan does invest heavily in china, should the tension became escalated these J co.s will no question exit china, and whose going to fill the vacuum? afterall these’re not such a chump change, if not for japan not sure who will either? whatever uncle sam has is already in the pot stewing. EU is too far away and dont have that many zeroes on their bank book. Perhaps Korea will fill in some void, but not a direct replacement. The longer this drag out will hurt the businesses, at the moment car manu are the worse hit, they can still make the cars and export them else where.
    Only God knows how this will end!

    the following are excerpts from scmphttp://www.scmp.com/business/economy/article/1068213/mad-economic-cost-japan-and-chinas-sovereignty-row

    In the last few years, China and Japan have expanded their investment, trade and economic relations to the point where they have become mutually dependent. Trade between China and Japan reached a record US$345 billion last year, according to Chinese figures.

    China became Japan’s biggest export market in 2009, taking over from the United States. China takes almost 20 per cent of Japan’s exports, compared to less than 7.7 per cent a decade ago.

    Japan is China’s third-biggest trading partner, after the European Union and the US.

    Japanese investment has poured into China. Chinese statistics show that by October last year there were 33,400 Japanese companies and affiliates operating in China, up 75 per cent from the already high figure of the year before. Already in 2010, Chinese statisticians reported, Japanese companies employed three million Chinese and accounted for 16 per cent of all foreign companies in China.

    This is not a relationship of Siamese twins. Statistics compiled by Reuters show that Japan’s investment in China topped a trillion yen (HK$97 billion) or almost US$13 billion last year, a rise of 60 per cent from the year before. Total Japanese investment in China over the past 15 years has topped US$80 billion.

    • 0 avatar
      L'avventura

      Nobody will fill Japan’s vacuum if they leave. To the contrary, the likelihood is that they will take suppliers and other non-Japanese companies with them. Manufacturing is highly intertwined.

      Taiwanese companies are already looking to follow the Japanese out:
      http://www.wantchinatimes.com/news-subclass-cnt.aspx?cid=1701&MainCatID=&id=20121026000135

      I also don’t think that its any coincidence that S. Korean president Lee Myung-Bak visited Thailand for the first time in 31 years to set up a free-trade agreement this week. We should expect S. Koreans to shift more of their investment from China to the fast-growing ASEAN countries.

      Next-year, the Kunming-Bangkok Expressway will be completed, which will link China to South East Asia. There is also a free-trade agreement in place which will mature in 2015. China should be worried about cheap goods from SE Asia flooding their market as wages can be a fraction of that in China.

      This is where the Japanese are moving, they aren’t taking jobs back to Japan, they will be moving part (or the whole) of their Chinese manufacturing South. The biggest concern for China is the fear of losing the status as the ‘factory for the world’.

      Also, let’s keep in mind, a lot of Japanese imports into China are unfinished goods. Which is most of that $345B.

      For instance, Apple would import Japanese-made camera modules or LCD screens from Japan into China to make their iPhone, which is then assembled by Foxconn, and then sold around the world. So a drop in Japanese imports indicates a drop in quantity of Chinese-made goods. Most products that are aimed at Chinese consumers are already made in China.

      There is an economic shift happening right to the next low-wage/high-growth area:
      http://thediplomat.com/pacific-money/2012/10/05/trade-routes-and-the-china-connection/

  • avatar
    Oelmotor

    Japan is the 3rd largest investor in China. In this case, I would reduce my presence and investments, expand in SE Asia and wait until the CCP is booted out of power.

    BTW…When the bubble does burst in China, the CCP will call in the tanks (i.e. Tiananmen Square) again, but on a much larger scale.

  • avatar
    wsn

    Qing Dynasty’s demise started when they lost a naval battle with Japan. The current regime would be smarter than that.

    The island dispute has been there for many decades. It’s not that things are getting worse, just how useful it is as a distraction of attention away from internal battles of the Chinese CCP. The whole thing will be forgotten in one year. Just like the SiChuan earthquake, or the Beijing Olympic. Who still remember those?

    • 0 avatar
      blowfish

      the mob control can be modulated by the higher up either to go full blown or disappear as fast as david copperfield done to the jumbo jet.

      is true many traders are planning to exit middle kingdom, but in reality is a love hate relationship.
      even back in those days ( 70s ) when USA was having a head to head war with MK in Naam, tricky Dick Nixon still decided to make deals with them.

      if u make things inside MK u save transporting costs, unless u discount that big market!
      so as a few manu are coming back to usa, reason is abundance of natural gas which can lowered the logistic cost.

      do read about some clothing manu moved to India , Pakistan , reason as cheaper labour costs , i take those goods are meant for market outside MK.
      MK is rife with corruption then not sure other countries be much better?

      Or mexico has a lot of population too & cheap labour, but workmanship & ethics werent the same.

  • avatar
    blowfish

    Qing Dynasty’s demise started when they lost a naval battle with Japan

    that we maybe able to point all the blame to empress dowager, she mostly interested in decorating her yee wor garden, http://www.foreigners-in-china.com/beijing-china-travel.html
    she diverted all her mullas away from arming her country, say no to buying guns, cannons, war ships from the occidentals.
    middle kingdom has nobody but ourselves to blame.


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