(Photo : Reuters)
A rising dispute between China and Japan over ownership of a group of isles in the East China Sea has escalated far worse than both countries ever could have envisioned. Due to anti-Japan protests taking place in China because of the dispute, Japan automakers chose to stop many of their auto operation plants in China, causing Japanese automakers to lose approximately $250 million.
Like Us on Facebook
The lost production total for companies such as Toyota Motor Corp, Honda Motor Co and Nissan has already amounted to approximately 14,000 as of Thursday, according to an estimate by HIS Automotive. The total is expected to rise, as some of the plants have still yet to re-open, including two Honda factories, and multiple Toyota plants.
Toyota Camry, Nissan Teana and Honda Accord represent three of the top five selling mid-size cars in China. Auto sales in China grew both in 2009 and 2010, but suffered a slight dip in 2011. Sales were up four percent in 2012 before the work stoppage.
"What is more important is how consumers will react from now on," said Koichi Sugimoto, a senior analyst at BHP Paribas to Reuters. "It wouldn't be strange if some people start thinking that it's better to buy South Korean cars then Japanese ones so that their cars won't be destroyed by demonstrators."
For anti-Japan protesters, Japanese cars with noticeable logos have become a target. They have already burned an entire Toyota dealership in Qingdao, and many other dealerships have suffered significant damage as well according to a company spokesperson.
One Honda dealership in Beijing has even been sending out text messages in an attempt to warn customers to be safe while driving their cars. Brake supplier Akebono Brake Industry is planning for the worse in case they face problems trying to import materials needed to supply Chinese automakers.
Toyota isn't discouraged however, as they are already planning how to bounce back. They are expecting to see a rise in sales in China to 1.8 million cars by 2015, a number that Akio Toyoda, the president of Toyota, believes to be obtainable.
"Chinese consumers would recognize the contributions of Japanese automakers and their Chinese partners to the Chinese economy. I hope the problem will be resolved soon," said Toyoda to Reuters.
