Chinese consumers shun Japanese car brands over islands dispute

The US car-making giants General Motors Corp and Ford Motor Co are reporting record high monthly sales figures in China, benefiting in part from a sales slump in Japanese-made cars, as a result of the ongoing Diaoyu Islands dispute.

GM and its joint ventures sold an October high of 251,812 vehicles in the country, a 14.3 percent rise on an annual basis, while its rival Ford sold 60,518 vehicles during the month, a 48 percent increase from last year.

GM officials said its joint venture Shanghai GM sold 117,611 vehicles in China during October, a year-on-year increase of 13.8 percent.

SAIC-GM-Wuling's domestic sales rose 15.9 percent from last year to 129,806 units, while FAW-GM sold 4,259 vehicles in the domestic market, down 2.7 percent from October 2011.

The figures mean that during the first 10 months of 2012, GM and its joint ventures sold 2.33 million vehicles in China, an increase of 10.5 percent year-on-year, and a record for the period.

Ford also said on Monday that it and its Chinese partner had record high sales for the second consecutive month in October.

Its 60,518 October vehicle sales meant total sales in the first 10 months of the year hit 221,000 units, a rise of 14 percent year-on-year.

The company said its performance was driven particularly by sales of its Focus model, which hit a monthly record of 33,614 units in October.

David Schoch, president and chief executive officer of Ford China, said: "The Focus has been one of the most popular car models in China.

"We are expanding our production capacity and dealership network, bringing two new SUV models in the next months to meet the local enthusiasm for such models."

Analysts said the strong performance by the two US companies was partly the result of Japanese brands losing market share, as public anger over the country's illegal "purchase" of China's Diaoyu Islands didn't ease.

Luo Lei, deputy secretary-general of the China Automobile Dealers Association, said: "Chinese consumers show little loyalty to particular brands.

"The Diaoyu Islands dispute won't remove their vehicle consumption plans, but will turn their focus from Japanese branded cars to other vehicles."

Toyota Motor Corp said last week that its sales in China continued to decline in October, with its deliveries of 45,600 vehicles, representing a 44 percent decline from last year. The decrease followed an annual sales drop of 48.9 percent in September. In the first 10 months, Toyota's sales in China dipped 1 percent to 685,900 units.

However, Japan's largest automaker said in a statement over the weekend that it had still raised its full-year group profit forecast from 760 billion yen ($9.44 billion) to 780 billion yen, as rising sales of its Prius hybrid car in the US and Japan would counter any lost business in China.

Toyota has announced it will pay compensation for repairs not covered by insurance on any cars damaged during Diaoyu Islands protests in September. It will also provide a 20,000-yuan ($3,200) subsidy to car owners who plan to trade in their damaged cars.

The Japanese brand Honda has also offered to repair any damage inflicted on its cars during the September protests, free of charge, as well as provide replacements vehicles to customers while repairs are carried out.

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