Diplomatic row hurts Japanese car sales in China

Thu Sep 6, 2012 4:16am EDT
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By Norihiko Shirouzu

CHENGDU, China (Reuters) - A diplomatic row between Japan and China is having "some impact" on Japanese car sales in China, a Nissan Motor Co Ltd (7201.T: Quote) executive said on Thursday, a sign the feud is affecting business between the world's second- and third-largest economies.

The potential damage to ever-closer economic ties is one big reason that both Beijing and Tokyo want to keep the row over disputed islands in the East China Sea from spiraling out of control. Still, both face domestic pressure not to look weak, given deep mutual public mistrust.

Nissan's Chief Operating Officer Toshiyuki Shiga said in the southwestern Chinese city of Chengdu that Japanese car manufacturers were having difficulty in holding big, outdoor sales promotion campaigns, which may have hurt August sales.

"Overall, not only for Nissan but also all Japanese makers, we have been hit by a drop in sales, especially August sales. That means there is some impact," Shiga told reporters on the sidelines of an auto conference.

"It is very difficult to conduct big sales promotional campaigns, especially promotional events outdoors."

Nissan has said it sold 95,200 vehicles in China in August against 98,100 in July. But the drop could also be due to an economic slowdown in China, the world's biggest auto market.

Nissan and other Japanese manufacturers were advised by local government officials to tone down sales campaigns and slow other sales activities to avoid becoming targets, Shiga added.

Mazda Motor Corp's (7261.T: Quote) China head, Noriaki Yamada, told reporters in Shanghai last week that there had been a slight impact on the number of visits by customers after the anti-Japanese protests. "I cannot say there won't be any impact on business in the future," Yamada said.   Continued...