Toyota China sales plunge 44% in October
Automotive News China | 2012/11/9

Toyota Motor Corp., which saw September sales in China tumble the most in a decade, reported deliveries slumped for a second straight month as Chinese consumers shunned Japanese cars.

October deliveries declined 44 percent from a year earlier to 45,600 vehicles, Asia's largest automaker said in a text message Thursday. That follows the 49 percent drop in September.

In the first ten months, sales fell 1 percent to 685,900 units, it said.

The results, which come four days before Toyota reports earnings, shows the aversion toward Japanese brands persists in China even though protests have subsided since September. Honda Motor Co., which cut its annual profit forecast by 20 percent this week, said demand may not return to normal until the Lunar New Year in February.

"The decline in China sales completely threw cold water on Japan's auto industry," Satoshi Yuzaki, Tokyo-based general manager at Takagi Securities Co., said by phone. "Japan's auto industry was seen as a strong industry in terms of export earnings, so the drop in China sales is very unfortunate."

The anti-Japan backlash, fueled by a territorial dispute over a group of islands claimed by both countries -- is turning into an opportunity for other foreign automakers to pick up market share in China.

Toyota, the first among major Japanese automakers to report October sales figures for China, has said it may fail to meet its target to sell 1 million units in the country this year. Deliveries from July through September period tumbled 23 percent, Toyota's biggest quarterly drop on record, according to company data stretching back to 2002.

For Japanese automakers, the boycotts against their products follow last year's tsunami and Thai floods that destroyed factories and disrupted supply lines.

The decades-long territorial dispute, involving a group of islands called Senkaku in Japan and Diaoyu in China, was reignited in April, when then-Tokyo Governor Shintaro Ishihara, a longtime critic of China, proposed buying the territories.

That led Prime Minister Yoshihiko Noda's administration to purchase the islets in September, escalating tensions between the two nations and sparking violent protests across China.

Lexus slows output as China demand falls
Automotive News China | 2012/11/9

Toyota Motor Corp. said production at its biggest Lexus manufacturing plant will probably fall short of its annual target because of slumping demand in China.

"We were targeting to build about 350,000 vehicles this year, but with the recent situation in China, that's looking to be difficult," said Iwao Nihashi, president of Toyota Motor Kyushu Inc. "The situation in China is still changing, and we're hoping for a fast recovery."

Asia's biggest automaker this week trimmed its full-year sales forecast because of slumping sales in China, where a territorial dispute is prompting consumers to shun Japanese brands.

Toyota expects the drop in demand to drain profits by 30 billion yen ($375 million) during the fiscal second half ending March.

Production at the plant, located in southwest Japan, is running at 70 percent of capacity, Nihashi said. That's in line with last year, when the factory assembled 302,000 vehicles based on annual production capacity of 430,000 units.

The United States is the biggest market for the Lexus luxury brand, accounting for 32 percent of sales, followed by Japan, according to company spokeswoman Shino Yamada.

Toyota builds more than half of its Lexus vehicles at the Kyushu plant, with the rest assembled at its Tahara factory near its headquarters in Toyota City, Japan, and in Ontario, Canada.

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