Japanese automakers gearing up in fast-growing Chinese market

Kyodo News

Japanese automakers are shifting into high gear to capture larger shares of the China car market, which jumped ahead of the United States as the world’s largest in 2009.

Nissan Motor Co., which saw an increase of nearly 20 percent in sales in April-September 2009 in China, plans to raise its annual local production capacity to more than 1 million units by the end of this year, up from current 875,000 units, company sources said.

Honda Motor Co., whose 2009 sales in China grew 22.5 percent from the previous year, will boost annual local production to 710,000 units in 2012, up from the current 610,000 units, industry officials said.

Toyota Motor Corp. also plans to raise its production capacity in China to 920,000 units from the current 802,000 units, although a time frame for the plan has yet to be set, according to the industry officials.

The Japanese carmakers have raised their targets and increased investment in China, while cutting their domestic sales targets and production.

Sales of new automobiles in China topped 13.5 million units in 2009, up from 9.38 million units in 2008, the official Xinhua news agency reported earlier this month.

The comparable figure in the United States was 10.43 million units for the same year, down 21.2 percent from 2008, according to data released by U.S. research firm Autodata Corp.

“The presence of the Chinese market has increased rapidly,” a source at Nissan said, pointing out that the company’s sales there rose 19.3 percent to 332,000 units in the April-September period of 2009, while domestic sales fell 10.3 percent to 285,000 units.

Nissan is set to launch a second factory in Zhengzhou, Henan Province, this fall and will increase capacity at a factory in Guangzhou, Guangdong Province, the source said.

Honda is preparing its fifth vehicle production plant in China, in Wuhan, Hubei Province, while postponing the completion of a factory in Yorii, Saitama Prefecture, and shelving a plan to increase output capacity at a Turkish factory, industry sources said.

A senior Toyota official said the Chinese market “will undoubtedly continue to grow further.”

Fuji Heavy Industries Ltd., which has been the only one among major Japanese carmakers not to manufacture cars in China, is now “looking for a local tieup partner,” and will begin production there in the next two to three years, President Ikuo Mori told reporters recently.