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Japan auto firms still aim big after sales dive
By Jin Jing |
June 20, 2011, Monday
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Print Edition
Print Edition
JAPANESE car makers suffered another sales slump in the Chinese market in May, as the after-effects of the March earthquake and tsunami continued to disrupt delivery of parts and manufacture of new models.
However, the companies said they remain upbeat about a robust recovery in the latter half of the year as normal production resumes.
Toyota sold 38,500 vehicles in China in May, down 35 percent from a year earlier, according to the company. That followed a 23.5 percent decline in April.
Honda was among the worst hit, reporting sales from its two joint ventures in China dived 68.4 percent to 27,204 units last month. The decline was narrowed by a 10 percentage points from that of the April.
Japan's car parts production and supply disruptions have hurt manufacturing both at home and abroad.
In China, joint ventures dependent on those parts have been forced to curtail output of cars since April.
Demand for imported models has also taken a hit from long waiting lists for popular models. Some consumers are simply shifting to other, more available brands.
The Japanese share of the China auto market fell in May for a second month to 15 percent. That compared with 23 percent of the passenger car market back in March.
In the latest month, German brands rose to take an 18 percent market share, with United States brands at 12 percent, according to the China Association of Automobile Manufacturers.
As the parts supply chain begins to mend itself, Honda and Toyota are expressing confidence in their ability to restore capacity ahead of schedule in China. That will lead to better sales results in the second half, the auto makers predict.
Honda earlier said its Chinese production at joint ventures Guangzhou Honda and Dongfeng Honda will return to or exceed normal levels in August.
On May 11, Toyota announced that an improved parts supply would enable its production in China to return to normal after June 10, earlier than the previous projected timeline for August.
"Production recovery of Japanese car makers is faster than initially expected," said Wang Liusheng, an analyst with China Merchants Securities Co. "The quicker recovery will improve their sales and market share in China, and spare parts suppliers in China will also benefit."
He added, "If Japanese car makers want to return to the pre-quake levels, higher investment in marketing and price discounts are inevitable."
Toyota and Honda said they have no plans to lower their sales targets in China this year and will schedule extra working shifts to make up for lost time.
"The worst time has passed," Zhu Linjie, a spokesman for Honda China. "We are in full swing to recover the lost capacity."
Honda said it will continue to double output at its joint venture with Guangzhou Automobile Group Co to 240,000 units by the second half of this year. It said it will produce another 100,000 vehicles a year in China when the second plant at Dongfeng Honda starts operation.
On the product side, Dongfeng Honda is planning to launch its own-brand vehicle, and Honda will also add more hybrid models and move forward the local production of electric cars in China, according to Zhu.
Niu Yu, an official from Toyota Motor China, told Shanghai Daily that parts supply to China is now able to meet demand and the car maker is on track to lift output in China.
However, the companies said they remain upbeat about a robust recovery in the latter half of the year as normal production resumes.
Toyota sold 38,500 vehicles in China in May, down 35 percent from a year earlier, according to the company. That followed a 23.5 percent decline in April.
Honda was among the worst hit, reporting sales from its two joint ventures in China dived 68.4 percent to 27,204 units last month. The decline was narrowed by a 10 percentage points from that of the April.
Japan's car parts production and supply disruptions have hurt manufacturing both at home and abroad.
In China, joint ventures dependent on those parts have been forced to curtail output of cars since April.
Demand for imported models has also taken a hit from long waiting lists for popular models. Some consumers are simply shifting to other, more available brands.
The Japanese share of the China auto market fell in May for a second month to 15 percent. That compared with 23 percent of the passenger car market back in March.
In the latest month, German brands rose to take an 18 percent market share, with United States brands at 12 percent, according to the China Association of Automobile Manufacturers.
As the parts supply chain begins to mend itself, Honda and Toyota are expressing confidence in their ability to restore capacity ahead of schedule in China. That will lead to better sales results in the second half, the auto makers predict.
Honda earlier said its Chinese production at joint ventures Guangzhou Honda and Dongfeng Honda will return to or exceed normal levels in August.
On May 11, Toyota announced that an improved parts supply would enable its production in China to return to normal after June 10, earlier than the previous projected timeline for August.
"Production recovery of Japanese car makers is faster than initially expected," said Wang Liusheng, an analyst with China Merchants Securities Co. "The quicker recovery will improve their sales and market share in China, and spare parts suppliers in China will also benefit."
He added, "If Japanese car makers want to return to the pre-quake levels, higher investment in marketing and price discounts are inevitable."
Toyota and Honda said they have no plans to lower their sales targets in China this year and will schedule extra working shifts to make up for lost time.
"The worst time has passed," Zhu Linjie, a spokesman for Honda China. "We are in full swing to recover the lost capacity."
Honda said it will continue to double output at its joint venture with Guangzhou Automobile Group Co to 240,000 units by the second half of this year. It said it will produce another 100,000 vehicles a year in China when the second plant at Dongfeng Honda starts operation.
On the product side, Dongfeng Honda is planning to launch its own-brand vehicle, and Honda will also add more hybrid models and move forward the local production of electric cars in China, according to Zhu.
Niu Yu, an official from Toyota Motor China, told Shanghai Daily that parts supply to China is now able to meet demand and the car maker is on track to lift output in China.
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