[h=3]By TOM ORLIK[/h]There likely won't be any quick resolution in the dispute between China and Japan for control of an obscure group of islands. But there's already one clear loser—the Japanese car industry.
Thousands of Chinese protesters marching on the Japanese Embassy in Beijing over the weekend, burning flags and smashing cars, signals the strength of anti-Japanese feeling among young Chinese. The proximate cause is a dispute over control of the Senkaku Islands, controlled by Japan and claimed by China, which call them the Diaoyu Islands. Lingering anger at Japan's 1930s invasion of China, and rivalry between Asia powers, runs deeper.
APAnti-Japan protesters burned a Japanese flag in Wuhan, central China's Hubei province, Sunday.
In the immediate future, it's bad news for Japanese car manufacturers, who already count China as a major market and a driver of future growth. Toyota, Nissan and Honda saw 11%, 17% and 20% of their 2011 unit sales from China, according to Bill Russo, China auto analyst at Synergistics.
The China Association of Automobile Manufacturers has said the downturn in sales of Japanese cars is already evident in the August data. Nissan has acknowledged that the row is impacting sales, and Honda dealers have canceled some promotional activities. There could also be longer-term consequences. The sight of Japanese cars smashed by angry mobs will not encourage dealers to place bumper orders for on next season's models.
Japan's auto firms still have many factors in their favor though. Many of their Chinese sales are made in joint ventures with mainland firms—a confusing factor for angry mobs and government officials considering trade sanctions. A reputation for reliability at an affordable price is another plus. A similar wave of protests in 2005 had little effect on the upward trajectory of sales. Japan's auto makers will hope that the latest wave of nationalist sentiment doesn't have a more lasting impact.
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Write to Tom Orlik at [email protected]
Thousands of Chinese protesters marching on the Japanese Embassy in Beijing over the weekend, burning flags and smashing cars, signals the strength of anti-Japanese feeling among young Chinese. The proximate cause is a dispute over control of the Senkaku Islands, controlled by Japan and claimed by China, which call them the Diaoyu Islands. Lingering anger at Japan's 1930s invasion of China, and rivalry between Asia powers, runs deeper.
APAnti-Japan protesters burned a Japanese flag in Wuhan, central China's Hubei province, Sunday.
In the immediate future, it's bad news for Japanese car manufacturers, who already count China as a major market and a driver of future growth. Toyota, Nissan and Honda saw 11%, 17% and 20% of their 2011 unit sales from China, according to Bill Russo, China auto analyst at Synergistics.
The China Association of Automobile Manufacturers has said the downturn in sales of Japanese cars is already evident in the August data. Nissan has acknowledged that the row is impacting sales, and Honda dealers have canceled some promotional activities. There could also be longer-term consequences. The sight of Japanese cars smashed by angry mobs will not encourage dealers to place bumper orders for on next season's models.
Japan's auto firms still have many factors in their favor though. Many of their Chinese sales are made in joint ventures with mainland firms—a confusing factor for angry mobs and government officials considering trade sanctions. A reputation for reliability at an affordable price is another plus. A similar wave of protests in 2005 had little effect on the upward trajectory of sales. Japan's auto makers will hope that the latest wave of nationalist sentiment doesn't have a more lasting impact.
[h=3]Want Heard on the Street live?[/h]Sign up for individual email alerts as soon as each column is published, or a daily newsletter with all of the day's Heards.
Write to Tom Orlik at [email protected]