NAGOYA – Toyota Motor Corp. is considering drastically reducing its vehicle production in China this month due to falling sales amid growing anti-Japanese sentiment, informed sources said Friday.
The leading automaker may cut its China production by as much as 56 percent from a year before to some 35,000 units, the sources said.
Toyota produced around 79,000 vehicles last October in China. Its monthly output there averages around 80,000 units.
Sales of Toyota vehicles have dropped in China due to a consumer boycott of Japanese products amid anger over the nationalization last month of three of the Senkaku islets, which are controlled by Japan but claimed by China and Taiwan.
Toyota has suspended operations at two plants in China since Sept. 26, four days ahead of the start of the eight-day National Day holiday period, to adjust production.
One of the plants, located in Tianjin, chiefly makes Toyota’s mainstay Corolla sedan. The other, located in Guangdong Province, mainly produces the Camry sedan.
The company plans to resume operations at the plants Monday.
Sales are unlikely to recover anytime soon as there are no signs of improvement in Japan-China relations. Toyota may take further steps if sales in China remain weak for a long period, the sources said.
The dwindling sales amid the territorial row may deal a blow to Toyota’s plan to boost its auto sales in China to 1 million units in 2012 from last year’s figure of around 900,000.
Insurers halt policy sales
Major Japanese insurance companies have suspended sales of new policies that cover damage caused by riots and strikes in China due to the recent unrest there, industry sources said Friday.
Japanese firms planning to do business in China could face greater risk if insurance firms put the policy sales on hold for a substantial period, while the insurers say they will resume sales when it becomes clear the bilateral political tensions have stabilized.
Anti-Japan protests erupted last month after the government nationalized three of the Senkaku islets, which are claimed by Beijing,
Subject to the suspension are portions of casualty policies that cover damage inflicted on company facilities by rioters or losses of earnings caused by work stoppages.
The insurers include Tokio Marine & Nichido Fire Insurance Co., Sompo Japan Insurance Inc. and Mitsui Sumitomo Insurance Co. They say they will continue to offer coverage for existing policyholders.
“We will consider hiking premiums” if the risk in China becomes greater, an official with a major insurer said.