As anti-Japan feeling ebbs, carmakers change gears

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As anti-Japan feeling ebbs, carmakers change gears

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A Toyota 86 coupe, left, is displayed at the exhibition hall of the 10th China International Automobile Exhibition in Guangzhou, south China, on Thursday. The auto show opened yesterday and Toyota is exhibiting 46 vehicles. The photo on the right shows Honda’s Concept C at the auto show. [REUTERS/XINHUA/ YONHAP]


Toyota Motor and Honda Motor, recovering from a consumer backlash in China, will continue to expand in the world’s largest auto market as their local venture partner said the worst is over.

Toyota, Asia’s largest automaker, will introduce 20 new models to China in the next three years, Senior Managing Officer Hiroji Onishi told reporters at the Guangzhou Auto Show on Thursday. Honda is guaranteeing buyers against damage due to anti-Japan sentiment, said Chen Binbo, an executive vice president at its China venture.

They are participating in their first major car show in China since large-scale, anti-Japan protests broke out in September over a territorial dispute that led to some cars being smashed and dealerships torched. The most difficult period has passed and people are calmer, said Zeng Qinghong, general manager of Guangzhou Automobile Group, which operates joint ventures with both Toyota and Honda.

“In 2013, Japanese brands will go all out to regain any lost ground encountered in the fourth quarter of this year,” Namrita Chow, a Shanghai-based analyst at industry researcher IHS Automotive, said. “This will mean new model launches, discounts and good service packages as well as an increased lineup of models on offer to consumers in China.”

Japanese automakers reported a plunge in China deliveries in September and October, as Chinese consumers shunned their cars after tensions escalated over the group of disputed islands known as Senkaku in Japan and Diaoyu in China.

Toyota showed 46 models at this year’s show in Guangzhou, expanding its exhibition space by 12.5 percent from last year. Honda, Japan’s third-biggest carmaker, displayed 23 models at the show, including the Fit hybrid compact, with plans to begin local production of hybrid models in China from 2014, according to the Tokyo-based company.

“Growth for Japanese brands will depend on how quickly the two countries solve the territorial dispute peacefully,” said Chow of IHS, which estimated that Japanese carmakers may suffer production cuts into 2014 and lose a combined 650,000 units in vehicle production if tensions don’t abate.

In contrast, Volkswagen AG and General Motors said they aim to continue growing faster than the industry in China.

Volkswagen, which also owns the Skoda and Audi brands, is outpacing the industry growth rate as “every business, every brand is selling especially well,” China chief Jochem Heizmann told reporters on Wednesday.

“Next year’s growth won’t be at the past five years’ rate, but China will continue to grow at a healthy, rational, mild growth rate, which is better for the Chinese market’s development,” Jochem said.

GM’s sales in China may be lifted by gains in commercial vehicle deliveries and demand for passenger cars, said Bob Socia, the automaker’s China chief, in an interview at the Guangzhou show.

The company aims to keep its position as the market leader among foreign automakers in China and focus on promoting its Cadillac brand, SUVs and export business, he said. Volkswagen edged ahead of GM in the third quarter in China sales, the first time in eight years, according to data compiled by Bloomberg.

“We recognize that there’s some formidable competition out there, but next year should be a pretty good year,” Socia said. “What we want to do is continue to outstrip the growth in the industry and try to grab share along the way, as we’ve done this year.”

Marin Burela, president of Ford Motor’s China joint venture, said 2013 will be a “red-letter year” for the automaker in the country as it competes in more vehicle segments.

“We will definitely sell more cars in 2013 than this year,” he said in Guangzhou. “We’ve now started to open up and enter into segments we previously did not compete in. We’re absolutely focused on the SUV market.”
Bloomberg

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