Even car sales cannot escape from the backlash of the Japan-China territorial dispute over the Senkaku Islands. According to a report in the Yomiuri newspaper, sales of Toyota cars in China fell by 50% on-month on September. Toyota would not yet confirm the figures, but will be releasing their sales report by Tuesday.
The unnamed source from Toyota said that 75,000 units were shifted in August but only half have been sold. At the height of the sometimes violent protests in China against Japanese businesses starting September 26, Toyota shuttered its factories but will re-open them on Monday. Both Toyota and rival Nissan have announced they will be cutting down production in China because the demand for Japanese cars has been drastically hit.
Jiji News and the Nikkei Business Daily have reported that Toyota’s October production will be cut by 50% due to the latest figures. This will eventually cause big problems for the labor force of its nine production sites in China. Even insurers have stopped giving insurance coverage in light of the riots.
This also comes at an unfortunate time for Toyota and Japan because China is a burgeoning auto market. In 2011, Toyota produced 800,000 vehicles and maintains 860 dealers across the country. The next few months will give a clearer picture on the long-term repercussions this conflict will have on Japanese businesses.[ via Yahoo Finance ]