Japanese brands fend off rivals at China auto show

Written by Associated Press | Guangzhou | Updated: Nov 23 2012, 09:21am hrs
Global automakers and their Chinese rivals put on sleek displays of new cars at a major auto show Thursday in Guangzhou, the southern Chinese stronghold of Japanese brands that have been hard hit by tensions between Tokyo and Beijing.

Nissan Motor Co, Toyota Motor Corp and Honda Motor Co were among the dozens of brands showcasing new vehicles at the auto show in bustling, prosperous Guang-zhou, near Hong Kong.

The beleaguered Japanese automakers have suffered sharp drops in their China sales since a territorial dispute over East China Sea islands flared in September, inflaming anti-Japanese sentiment and sparking sometimes violent protests. But they didnt shy away from showing off new models, going head to head with less established rivals sensing an opportunity to seize market share.

The show caps a year of relatively slow sales for carmakers in China, where competition is stiffening after years of white-hot growth. Despite the slowdown, the country remains the worlds biggest auto market, underscoring its importance to carmakers.

Although the automobile market of China confronts great uncertainties, its great potentiality still makes us confident and eager for the future, said Yao Yiming, deputy general manager of one of Honda Motor Cos local joint ventures, Guangqi Honda. Honda unveiled several models for the China market including the Fit Hybrid.

Foreign marques such as PSA Peugeot Citroen, a relative newcomer to China, also brought new models designed specifically for the Chinese market, which is having an increasingly large influence on auto designs.

The anti-Japanese sentiment is of course giving a boost to the French automaker's sales, said Jean-Yves Dossal, the company's director of Asian operations. Not that much, but still this is true that some Chinese customers are scared a little bit of buying a Japanese car.

The companys new models include the Peugeot 3008, a crossover sport utility vehicle that is more aggressively styled than the European version, and the Citroen C4L, a midsized sedan thats only sold in China.

Chinese brand BYD Auto, backed by billionaire investor Warren Buffet, launched the Si Rui, a midsized sedan that it hopes will replicate the success of its best-selling F3 sedan. Fiat, another latecomer to China, highlighted the Viaggio, its first car produced in China, which went on sale in September. Jack Cheng, general manager of the companys joint venture with a Chinese carmaker, said China will be the locomotive for Fiats global sales.

China overtook the US in 2009 as the worlds biggest auto market by vehicles sold. Sales grew a blistering 35% in 2010 thanks partly to government incentives but have eased off as cities impose restrictions on car registrations to cut traffic congestion and smog. Sales in October rose 6.4% to 1.3 million vehicles, after contracting 0.3% in September.

Many global automakers have been expanding in China to counter stagnant markets at home. Some 18.5 million vehicles were sold in China last year and automakers expect that number to rise to 30 million by 2020.

IHS Automotive analyst Namrita Chow said she expects carmakers like Peugeot and Hyundai to use the show to strengthen brand awareness of their vehicles in the hope that they gain some of the lost Japanese market share.

Toyotas vehicle sales in China fell 44% year-on-year in October to 46,000, following a similar decline in September. The company has already lowered its full-year sales target to 850,000 from 1 million because of the anti-Japanese sentiment. Nissan and Honda have seen similar sales drops and have also adjusted their forecasts. Nissans China sales were down 41% in October to about 64,000 while Honda's dropped 46% to 24,000.

Monthly sales data showed that other foreign brands long established in China including General Mo2tors and Volkswagen were benefiting the most as customers opted to stay away from Japanese brands.