Collateral Damage: Toyota Loses Large Chunk Of China Sales, All Eyes On Nissan

Bertel Schmitt
by Bertel Schmitt

Toyota’s sales in China took a big hit in September, reports by the Yomiuri Shimbun and Reuters say. Executives of Japanese carmakers are putting on a brave face when it comes to China, but are worried that their significant China business could become a casualty of the East China Sea troubles.

No official data are available yet, but the Yomiuri says that Toyota’s September sales in China “halved,” after many Chinese customers canceled their orders in September. Reuters talks about a 40 percent reduction. A senior Toyota executive told the usually very reliable Reuters that Toyota sold about 50,000 cars in China in September, down from about 86,000 in September 2011.

The Nikkei [sub] says that Toyota plans to “drastically slash production in China this month, possibly by around 50% from the initially planned level.” According to the report, Toyota plans to stop Lexus exports to China until November. Lexus cars are Toyota’s main export to China, with about 89,000 units shipped in 2011. Lexus already had a hard time competing with the domestically-produced Audi, BMW and Mercedes.

Smaller Mitsubishi said its sales dropped 62.9 percent to 2,340 vehicles in China in September after a 33.4 percent slump in August, The Nikkei [sub] reports.

10 percent of Toyota’s global volume is sold in China. All eyes are on Nissan, which has the highest China exposure of all Japanese carmakers. Close to thirty percent of Nissan’s global volume was planned to be sold in China this year. At the Latio launch today in Yokohama, Nissan Executive VP Takao Katagiri said that numbers will be made available when China returns Monday from the mid-autumn festival holiday. The week-long (and sometimes two week long) holiday fell in the first week of October this year. Last year, the holidays begun mid September, making comparisons complicated.

However, Audi’s sales rose 20 percent to 35,512 vehicles in China in September, BMW was up 55 percent, Mercedes 10 percent. Sales of GM are not yet available.

In a private conversation today, a leading executive of a Japanese carmaker expressed his hope that the matter will boil over soon, saying that there is “too much at stake for all sides involved.” The stakes indeed are high. Trade between China and Japan climbed to a record $345 billion in 2011, and neither can easily afford a disruption of their already slow economies.

A year ago, Nissan’s CEO Carlos Ghosn said in Tokyo:

“For carmakers, China is one of the most profitable markets in the world. It used to be the United States. Now it is China.”

For Japanese carmakers, this is about to change. Japanese automakers are on an April to March fiscal year, and their second half is likely to take a painful blow.

For all carmakers, this underscores the huge dependency on a Chinese market, which can turn on the whim of Beijing’s rulers. 29 percent of Volkswagen’s global sales were in China this year. GM also sold 29 percent of its global production in China. However, GM is less likely to profiteer from the Japanese misfortunes. More than half of GM’s China sales are Wulings and trucks made with FAW. Chinese who shy away from a Corolla usually don’t want to be seen in a Wuling Sunshine either. From the early data, it looks like the Japanese misfortunes will further German gains.


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  • Billfrombuckhead Billfrombuckhead on Oct 05, 2012

    Hyundai had to withdraw from Japan and now Toyota will be run out of China, what goes around comes around.

  • Lorenzo Lorenzo on Oct 05, 2012

    GM is missing out on some licensing revenue. With some styling changes, Wuling can be cranking out Oldsmobile Cutlasses and Pontiac Bonnevilles. As "American" makes, they'll probably sell better than Sunshine!

    • APaGttH APaGttH on Oct 05, 2012

      Actually, this is a pretty darn good point and at least on paper, a good idea.

  • SCE to AUX Probably couldn't afford it - happens all the time.
  • MaintenanceCosts An ugly-a$s Challenger with poor equipment choices and an ugly Dealership Default color combination, not even a manual to redeem it, still no sale.
  • Cha65689852 To drive a car, you need human intelligence, not artificial intelligence.Unfortunately, these days even human brains are turning into mush thanks to addiction to smartphones and social media.
  • Mike1041 A nasty uncomfortable little car. Test drove in 2019 in a search for a single car that would appease two drivers. The compromise was not much better but at least it had decent rear vision and cargo capacity. The 2019 Honda HRV simply was too unforgiving and we ditched after 4 years. Enter the 23 HRV and we have a comfy size.
  • SCE to AUX I wonder who really cares about this. "Slave labor" is a useful term for the agendas of both right and left."UAW Wants Auto Industry to Stop Using Slave Labor"... but what will the UAW actually do if nothing changes?With unrelenting downward pressure on costs in every industry - coupled with labor shortages - expect to see more of this.Perhaps it's my fault when I choose the $259 cell phone over the $299 model, or the cheaper parts at RockAuto, or the lower-priced jacket at the store.Do I care about an ethical supply chain? Not really, I just want the product to work - and that's how most consumers are. We'd rather not know.Perhaps the 1990s notion of conflict-free, blood-free, ethically-sourced diamonds will find its way into the auto industry. That would be a good thing.
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