• Bloomberg


Nissan Motor Co., the best-selling Japanese automaker in China, said deliveries are off as it cut back on marketing events in the wake of violent anti-Japan demonstrations last month.

Nissan has reduced the number of promotional activities on the advice of Chinese authorities, Nissan Chief Operating Officer Toshiyuki Shiga said Thursday at an auto forum in Chengdu, Sichuan Province. The impact is difficult to quantify, he said.

Shiga’s comments may be among the first from a major company acknowledging fallout from the Senkaku Islands dispute that has soured diplomatic ties and triggered the protests.

Japanese companies are increasingly relying on China for growth to counter shrinking demand in Europe.

“Sales in China were already slowing, and this may accelerate the slowdown in sales,” said Mitsushige Akino, executive director of Ichiyoshi Asset Management Co. “I won’t be surprised if production becomes affected too, and if tension further heightens between the nations it may have a bigger impact.”

Tomoko Takemori, a spokeswoman for Honda Motor Co., said the company hasn’t heard of any impact on sales or production in China. Naoto Fuse, a spokesman at Toyota, said the carmaker is not seeing any impact now from the political tension with China.

Li Bing, an engineering business owner, helps illustrate why companies such as Nissan are expressing concern.

“German and American brands are all acceptable, but definitely not Japanese ones,” said Li, 34, who is attending the Chengdu Motor Show. “All my friends are boycotting Japanese brand stuff. No matter how good the quality and pricing are, we won’t buy.”

Demonstrations were held in more than 10 cities and featured calls for a boycott of Japanese goods, the state-run China Youth Daily reported last month. Japan asked the Chinese government to protect its citizens living in China, Chief Cabinet Secretary Osamu Fujimura said.

The China Daily said the protests of varying size in cities including Beijing, Qingdao, Guangzhou and Shenzhen were mostly peaceful and the newspaper urged people to be “rational.”

“When choosing between a Japanese- or a German-branded car, both equal in terms of value, why would you buy a Japanese car when you see residents smashing them in such anti-Japan protests?” asked Song Jian, president of Tsinghua Institute for Automotive Technology. “It would definitely weigh on your buying decision.”

Still, Kenichi Hirano, market analyst at Tachibana Securities Co., sees any impact on sales from tensions between the two countries as temporary.

“These tensions are reoccurring and every time it happens, the Communist Party controls and quietens down the tension before it gets too heated,” he said.

Nissan’s Chinese partner joined Hirano in ruling out a prolonged impact.

There will definitely be “some sort of impact, but I believe Chinese consumers are a lot more rational now,” Zhu Fushou, general manager of Dongfeng Motor Corp., the Chinese joint venture for Nissan, said Thursday.

Nissan’s Shiga said that growth in China will probably come from the less developed cities, such as Chengdu, where car ownership levels are lower and incomes are rising.

Asked if anti-Japan sentiment has made it harder for Nissan and other Japanese automakers to sell in the inland areas, just as growth is expected to outpace the richer eastern coastal areas, he said: “I can imagine so.

“Both countries are important to each other economically,” he said. “I hope this issue will be solved as soon as possible and not continue.”

Honda ups U.K. output

Honda Motor Co. will invest $425 million to expand production at a factory in England, its biggest investment in the U.K. in more than 10 years.

Honda said Thursday it expects to double output at the factory in Swindon by the end of 2012 to 183,000 units, rising to 250,000 annually within three years. The company also added 500 employees, boosting its workforce at the plant making cars and engines to 3,500.

The investment will help Honda meet overseas demand for cars, including the CR-V sport utility vehicle, and Civic and Jazz compacts produced at the plant. Honda said 60 percent of output will be for export to more than 60 countries, including in Europe, the Middle East, Africa and Australia.

Honda posted profit and sales that missed analyst estimates for the three months that ended on June 30 after the yen rose and it increased marketing spending.

Honda’s business in Europe had an unexpected loss of ¥7.63 billion in the quarter because of the region’s slowing economy. The automaker will implement a four-day workweek at the Swindon plant from September to November and reduce hours because of the European downturn, the carmaker said in July.

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