Japanese automakers target China’s youth

by Ko Hirano

Kyodo

Despite the bilateral dispute over the Senkaku Islands, young Chinese consumers appear more concerned with product quality and safety rather than Beijing’s relations with the countries making the products.

When asked about the boycott on Japanese products in China after Japan nationalized the China-claimed islets last September, Meng Qingli, 27, laughed and said it didn’t affect her family’s plans to buy a Japanese car this year.

“We don’t mind that kind of issue,” Meng said at the Shanghai international motor show, which opened Saturday.

“We look at quality, safety, fuel efficiency and price levels, and we think Japanese cars meet these criteria,” Meng said.

The Shanghai worker said that although older people may have different perceptions of Japan, she believes young people “will accept Japanese cars” despite the Senkaku dispute.

As if to grab attention from young Chinese consumers like Meng, Nissan Motor Co. on Saturday unveiled the Friend-ME concept car targeting Chinese youths born in the 1980s, a generation the automaker said “will emerge as the world’s largest single-market segment.”

Studying the needs of young Chinese and the lifestyles of Chinese families, Toyota Motor Corp. unveiled FT-HT Yuejia, a six-seater concept vehicle, and Honda Motor Co. displayed the Jade, a mass-produced car expected to go on sale in September.

Visiting the Toyota booth at the auto show, Guo Qiang, 30, another company employee in Shanghai, said he is considering replacing his Volkswagen with a Japanese car.

“We have heavy traffic jams and serious air pollution in major cities such as Shanghai, Beijing and Guangzhou, and fuel prices are rising sharply,” Guo said. “With their high quality and efficiency, Toyota and other Japanese automakers have advantages over foreign rivals.”

Japanese executives said that despite the political risks, such as a reoccurrence of riots and boycotts on Japanese products, China — the world’s largest automotive market — is still attractive.

Kimiyasu Nakamura, president of Dongfeng Motor Co., a joint venture between Nissan and Dongfeng Motor Corp. of China, said the Senkaku dispute sharply reduced Nissan’s sales last fall but that they rebounded to year-earlier levels around April.

“I expect the auto market (in China) to post 8 percent growth this year,” Nakamura told journalists in Shanghai.

“We are behind our competitors. We would like to catch up with the pace of growth in the industry with the release of new cars,” Nakamura said.

According to the China Association of Automobile Manufacturers, sales of Japanese cars in China fell 14.3 percent in March from a year earlier to 238,300 units. In contrast, U.S. and German automakers increased sales by 31.1 percent and 24.6 percent, respectively.

“There is nowhere in the world where the passenger car market expands by 1 million units a year,” Nakamura said. “This is an attractive market.”

Underscoring such a positive outlook but with increased competition, Honda President Takanobu Ito on Saturday unveiled a plan to manufacture the Acura, its luxury brand, in China for the first time in three years.

A Mazda Motor Corp. executive said China’s core consumer has been shifting to youths born in the ’80s and the ’90s, and that the introduction of the new Atenza sedan in June is part of a strategy to lure them.

Mazda is stepping up efforts to meet its sales target of 200,000 units in China in 2013 before achieving the goal of 400,000 units in the year to March 2017.

As Japanese carmakers vow to expand operations and businesses in China, the Chinese government appears to be sending mixed signals to Japan, with some officials expressing a willingness to improve ties with Tokyo but others cautious about resuming high-level exchanges.

“Frankly speaking, China’s economic development today owes a lot to cooperation with Japan,” Vice Premier Wang Yang was quoted as saying in a meeting last week in Beijing with former House of Representatives Speaker Yohei Kono.

“China and Japan can build a win-win relationship if they cooperate, but they both fall down if they fight,” Wang said.

However, Chinese maritime surveillance vessels have been intruding into Japanese territorial waters around the Senkaku Islands, and a Chinese defense white paper published recently accuses Japan of “making trouble” with Beijing over its effective nationalization of the islets, which China calls Diaoyu and Taiwan calls Tiaoyutai.

Beijing has delayed a trilateral summit that South Korea had planned to hold with Japan and China in late May in Seoul, according to diplomatic sources. China may have judged that, with no signs of concession from Japan on the Senkakus issue in sight, it is too early for Premier Li Keqiang to meet with Prime Minister Shinzo Abe.

“When buying a car or other products, I don’t focus on political issues,” Shanghai resident Guo said. “The Diaoyu issue involves governments of China and Japan, not ordinary citizens like me. But, of course, I hope the issue will be resolved soon in a peaceful way.”

MMC trims output

Kyodo

Mitsubishi Motors Corp. said Monday it will trim annual domestic production capacity by around 20 percent, consolidating four production lines at its main factory in Kurashiki, Okayama Prefecture, into two from around December.

While annual output will fall to just over 400,000 units from 598,000, all 3,050 employees working at the factory will be retained, the company said.

Given sluggish exports of domestically made vehicles and unfavorable domestic sales, the automaker is aiming to boost the plant’s operating rate.

Meanwhile, the automaker said it will resume nighttime operations at the plant, which it halted last May, starting May 6 to produce a minivehicle developed jointly with Nissan Motor Co.

The vehicles will go on sale in June under the name eK Wagon for Mitsubishi and DAYZ for Nissan.