Toyota Motor is
cutting production of vehicles for the Chinese market in a sign of the
deepening economic impact of anti-Japanese demonstrations that swept the
country this month.
Like
many other Japanese companies, Toyota closed factories in China for several days
amid the protests. Its factories are now operating again, but in some cases
output is lower than it was before the shutdowns, the company said on Tuesday.
"We are adjusting production on a business-by-business basis, taking into
account the present situation with orders and sales," Toyota said, though
it declined to give specific figures.
The
carmaker's decision underscores the risk of lasting fallout for businesses from
the maritime dispute between Asia's two largest economies.
Toyota
and other Japanese manufacturers were easy targets for Chinese rage over
Tokyo's purchase of the Senkaku islands -- known as the Diaoyu in China -- from
their private owner. Attacks on Japanese-made vehicles during the protests were
caught on television and are likely to put off even politically ambivalent
Chinese buyers.
Japanese
carmakers were already struggling to hold their market share in China against
advances by US and European rivals.
John
Zeng of LMC Automotive in Shanghai said the collective share of Japanese carmakers
has fallen to 22.8 per cent from 26.6 per cent in 2009. In August, as the
Senkaku dispute was gathering steam, German carmakers outsold Japanese groups
for the first time.
"With
the introduction of a large number of high-tech Volkswagen vehicles in China,
Japanese compact and midsized cars are being attacked by German or even Korean
cars," Mr Zeng said.
Toyota
had expected to sell 1m vehicles in China this year, or just over a tenth of
its projected worldwide sales. Falling demand in China could also affect its
production in Japan. The Nikkei business daily said output at a Lexus plant in
southern Japan that makes luxury vehicles for export to China and other markets
was being cut by 20 per cent.
Nissan,
which depends on China for a higher percentage of its sales than Toyota,
declined to comment on production levels but suggested it might make
adjustments in the coming months. "The situation from October onward is
still fluid," it said.
China
is Japan's biggest trading partner while Japan is China's second-biggest after
the US, and the economic fallout from the dispute in the East China Sea has
already been felt in other sectors.
Japanese
shipping companies have reported unusual delays at Chinese ports, while China's
tourism bureau issued a travel warning for Japan last week. Japan Airlines said
it would cut flights to Beijing and Shanghai in response to tens of thousands
of cancellations.
By Jonathan Soble and Patti
Waldmeir, FT.com September 26, 2012
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