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Backlash slows Toyota production

By Liang Fei (Global Times)

08:31, September 27, 2012

Japanese automaker Toyota Motor Corp Wednesday denied media reports that the company would halt production in China for the whole month of October, and said it is also untrue that it would stop exporting vehicles to China.

Japanese newspaper Asahi Shimbun Wednesday reported that the company would completely halt its China production next month and would halt all vehicle exports to China.

Xu Yiming, a spokesman for Toyota China, told the Global Times that the report is inaccurate. However, he said that Toyota factories in China would "adjust production according to the market condition."

Xu said that the company's joint venture in Guangzhou and a factory in Tianjin would stop production starting from Wednesday and the production halts will extend into the upcoming eight-day national holiday.

Toyota had already halted part of its China production for several days starting September 18, the date that marks Japan's invasion of China in 1931. Production resumed Monday.

Toyota had an annual sales target of 1 million vehicles in China this year, which accounts for nearly 10 percent of its global sales target. In 2011, Toyota sold 900,000 vehicles in China.

"It will be very difficult for the company to realize its annual target this year. Actually, it would be not bad if Toyota could achieve last year's number," said Zeng Zhiling, an analyst at Shanghai-based LMC Automotive.

Xu said that sales have been affected by the dispute over the Diaoyu Islands, but added that recent sales data is still not available.

Japanese carmakers have been curtailing production as recent news of protesters smashing Japanese cars has put off many potential buyers.

Luo Yun, a spokeswoman at Zhengzhou Nissan Automobile Co, a Sino-Japanese joint venture, confirmed with the Global Times that the company would also halt production starting Thursday until the end of the national holiday.

Data from the China Association of Automobile Manufacturers showed that in August Japanese brands sold 226,900 vehicles in China, a 2 percent year-on-year drop. It is the only group to see a decline among foreign brands.

The market position of Japanese cars had already been shattered even before the recent Diaoyu Islands dispute, Zeng noted, "Market share of Japanese-branded cars has dropped to some 22 percent this year from around 26 percent in 2009, mainly because of several massive recalls and the disruption of the big earthquake in March last year."

Experts noted that auto brands from the US, South Korea and Europe, especially German brands, are expected to see better performance this year, and consumers' desire for Japanese cars is not very likely to resume soon.

"The current disputes between the two countries will also affect the distribution network of Japanese brands in China, given that distributors may consider the risks after several Japanese car dealerships were smashed by protesters early this month," Zeng noted.

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