By on February 2, 2013

Toyota, along with its Japanese peers, has wallowed in double digit minus territory in China, ever since cars were upturned and dealerships torched in September over a few uninhabited rocks in the East China Sea. In January, China sales of Toyota shot up 23.5 percent compared to the same month a year earlier. Are Japanese fortunes in China finally turning to the better?

Sales lost by Japanese brands
Sept Oct Nov Dec Jan
Toyota -49.0% -44.1% -22.1% -15.9% 23.5%
Nissan -35.0% -41.0% -29.8% -24.0%
Honda -41.0% -54.0% -29.2% -19.2%

 

We don’t think so. Neither does Toyota. “The results are higher than a year ago as the Spring Festival fell in January last year,” Toyota told Reuters . Like every year, we are faced with a phenomenon called Chinese New Year. It is hard to grasp unless you have been there, endured WWW III-equivalent fireworks for a month, and lived through closed shops for weeks. Trust me: Something really serious is going on when Chinese close their shops.  For the weeks surrounding Chinese New Year, China is for all intents and purposes closed.

Should someone want to attack China, do it during Chinese New Year, the General Staff, their aides and mistresses will all be vacationing in Thailand while the soldiers are back with their families, eating dumplings and hoping to get the one with the coin. Last year, Chinese New Year was on January 23, and sales tanked across the board. This year, Chinese New Year starts on February 10.

The year of the snake can be treacherous. When Chinese new car sales will be announced next week (unless the CAAM did already “beat the traffic” and is on vacation,) January numbers will be glorious. February numbers, announced in March, will be horrendous. With the help of TTAC, you can crease your forehead and announce: “January sales in China will go to the Moon, but in February, that bubble will burst. Want to bet?” It’s a sucker bet, try it. If you can find that sucker, TTAC can make you rich.

Likewise, Japanese sales will be way down in February, percentage-wise. Ye Sheng, an analyst at Ipsos, told Reuters that“focus should be on the first-quarter data rather than monthly figures.” We agree. A year ago, we told you, and we will tell you again: “Ignore any numbers coming from China in January or February, especially percentages.”

As for the sales of Japanese brands in China, I  expect continued rough sledding. As you can see from the chart, sales have improved, along with huge marketing activities and discounts. In China, to drive a foreign-branded car is a sign of achievement. After the riots, driving a Japanese-branded car caused loss of face. This will not go away over night.

Toyota thinks likewise, and cautiously plans for 900,000 units to be sold in China this year. That would be 2 percent above the 2011 crisis level. In 2012, Toyota’s sales in China dropped nearly 5 percent to 840,000.

Japanese OEMs, along with their Chinese joint venture partners, see their profits suffer from  the islands spat.  We will probably hear more this coming week when Nissan and Toyota will announce their quarterly results.

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8 Comments on “Toyota’s China Sales Way Up! Is Peace Breaking Out?...”


  • avatar
    Tosh

    Urgh, so much reading. Where are the scrawny spokesmodels BS is known for…?

  • avatar
    Volt 230

    Maybe the govt is buying them so that they can have their people destroy them again for the international media to video and photograph.

  • avatar
    Summicron

    Without the Spring Festival explanation this would be amazing.
    But any gain at all is still impressive so close in time to those burning dealerships and smashed cars.

    What staggers me is that so many Chinese are willing to again buy Japanese. there must be cosmopolitan enclaves in China where it’s reasonably safe to do so.

    And if the past 40 years of American purchasing is any example, within those enclaves many will consider it a badge of superior intelligence and affluence to buy a car considered taboo by the government and its puppet goons.

  • avatar
    Big Al from Oz

    The Chinese market will be an amazing future market.

    The Chinese, comparatively speaking are where the US was in the early 20th century. China will need massive resource from all sectors to secure its future, just like the US.

    The US has encountered similar displays by countries in its recent history, and yet the US has survived. The Japanese will survive as well.

    I don’t agree with the social and economics intrusion of the Chinese government. But the Chinese can’t change overnight, if the changes are to fast the country will fold. As the Chinese people become more affluent they will demand changes and the government will have to prevail to prevent a civil war.

    The difference between the Chinese and Japanese is almot polarising. The Chinese are capitalist living in a communist country and the Japanese are socialist living in a capitalist country. Oh, before anyone comments that was a tongue in cheek generalisation.

    The island issues in the region has been an ongoing affair now for over 3 decades and will not end, this will rear its ugly head again as China becomes more powerful.

    Also, look at the lengths the West has gone to secure resources. The possible outcomes can be frightening.

    What we need to do in the West is to try and secure as much bi-lateral trade with China, then we can have a more influential relationship and all will benefit.

  • avatar
    amca

    The Chinese pride themselves on their long, long history. “5,000 years continuous history” they are fond of telling you. Part of that is they never forget. The Japanese are unlikely to be forgiven their actions in the 20th Century. Ever.

  • avatar
    icemilkcoffee

    The general trend is that the japanese car makers are gradually recovering lost ground. I predict they will recover all the lost ground before Q1 is over. The anti-japanese nonsense is just flash-in-the-pan. As much as the national government likes to fan nationalism, chinese people are just not nationalistic by nature. This too shall pass and the japanese carmakers will again continue their conquest in China.


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