Japanese car makers increase Chinese production

Posted on 30 May 2013 by Tim Brown

Japan's biggest car manufacturers - Toyota, Nissan and Honda - all scaled up production in China in April, suggesting an improvement in market acceptance following a consumer backlash last year.

According to the Wall Street Journal’s Market Watch, Toyota – Japan’s biggest car maker by sales volume – said Thursday that its Chinese output gained 8.7% from a year earlier to 72,955 vehicles. Nissan Motor said it built a total of 106,797 vehicles in the latest reporting month, up 7.1% on year. And Honda, Japan’s third largest auto maker, reported production of 64,920 vehicles, up 5.9%.

The gains have been partly attributed to a longer operating period, which was not subject to as many holidays as the previous year. However, the figures also suggest that the Chinese consumer backlash, which occurred in September last year amid a territorial dispute between the two countries, has now subsided.

In October last year, Toyota was forced suspend part of its production at its Tianjin plant due to dampening sales in China.

The plant produces vehicles, such as Corolla, Crown, RAV4 and Vios. The plant produces 500,000 vehicles annually and accounts for 60% of the company’s total production volume in China.

The move followed a drastic sales volume drop in the country following the territorial dispute between China and Japan over the Diaoyu Islands, an issue which continues to be unresolved.

At the time, a spokesman for Toyota said: “The tense Sino-Japan relations has affected sales of Toyota automobiles in China,and it is a common practice for a company to adjust production volume based onmarket demand and orders.”

With the latest monthly data included, Toyota reported its cumulative output in China between January and April grew 7.4% from the same period a year earlier. But a Toyota spokesman said it is premature to say if the company is experiencing a clear turnaround in the basic trend. “We still can’t be optimistic,” he said.

The spokesman said the 8.7% gain in output in the latest reporting month is somewhat exaggerated by a low basis of comparison in April last year, when its production remained relatively low due to a switch to new models at its production lines. In addition, the spokesman pointed out that still sagging sales in China, which have fallen 11% on year between January and April, were much weaker than a targeted 7% sales gain to 900,000 vehicles this year.