TOKYO - Japanese automakers, led by Nissan Motor Co, have lost an estimated US$250 million (S$307 million) in output because of anti-Japan protests in China this week and now face the risk that sales will sputter in the world's largest car market.
Chinese protesters took to the streets this week in response to an escalating dispute with Japan over ownership of a group of isles in the East China Sea, prompting Japanese automakers including Toyota Motor Corp, Honda Motor Co and Nissan to temporarily halt operations at plants in China.
Lost production volume from those suspensions amounted to around 14,000 vehicles as of Thursday, according to an estimate by IHS Automotive. That would mean immediate lost revenue of about US$250 million, based on an average vehicle sticker price of about US$18,000 for the Japanese brands.
That toll could rise. Toyota said some of its China plants are still suspended, without specifying. Honda also has two factories halted, while Nissan has resumed operations. Nissan has been the most successful Japanese automaker in China, and is most exposed now. Its projected sales in China account for 27 per cent of its global sales volume, compared with 18 per cent for Honda and 11 per cent for Toyota.
Industry executives and analysts said automakers would be able to make up for lost output by running more overtime.
"What is more important is how consumers will react from now on," said Koichi Sugimoto, a senior analyst at BHP Paribas. "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."
Moody's credit rating agency said it was hard to predict how"rising anti-Japanese sentiment" would affect business.
"The possible implications - in an extreme and unanticipated scenario - could include the loss of access to a significant and growing market ... or a reduction in the ability of Japanese manufacturers to locate facilities in China."
"CAR IS JAPANESE, MIND IS CHINESE" With immediately recognisable logos, Japanese cars became a target of havoc for anti-Japan protesters in China.
Protesters burned a Toyota dealership in Qingdao and several more dealerships suffered damage, a company spokesman said.
A Honda dealership in Beijing sent out text messages warning customers to be careful. Photos circulated online of Japanese cars carrying banners such as "Car is Japanese, Mind is Chinese"and "From now on, I will boycott Japanese goods".
Some Japanese companies are coming up with contingency plans in case tension escalates. Brake supplier Akebono Brake Industry is preparing contingency plans in case it faces problems in importing materials needed to supply automakers in China, the company's CEO told Reuters on Thursday.