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China’s Road to Recovery

Jan. 9 – Tokyo – Nissan sales in China are steadily recovering as the impact of a territorial island dispute between Japan and the mainland show signs of subsiding.

Sales for the month of December fell 24%, a marked improvement from a 30% decline in November and a 41% drop in October.

Nissan COO Toshiyuki Shiga at an industry New Year event in Tokyo

Annual sales for Japan’s largest automaker in China were down 5.3% to 1.18 million units, exceeding the revised target announced in November.

“We are completely in a recovery mode and maybe after Chinese New Year we can be back to the normal level of sales,” said Nissan Chief Operating Officer Toshiyuki Shiga, at a New Year gathering of automotive manufacturers in Tokyo on Jan. 7.

Japanese automaker sales slumped in the world’s largest car market as Chinese consumers boycotted showrooms after tensions rose over the disputed Senkaku or Diaoyu islands in September.

Toyota reported a 4.9% decrease in new car sales for 2012, while Honda sales fell 3.1%.

But December data suggests a faster-than-expected recovery and new governments in both nations could mend ties between Asia’s two biggest economies.

“I think improvement of relations can come from working on various issues, we need to find common interests that are mutually beneficial,” said Japanese Foreign Minister Fumio Kishida.

Cars lined up for final inspection at Nissan's Huadu plant

Nissan also bolstered showroom traffic by offering to repair cars damaged during anti-Japan demonstrations and has introduced a new quality assurance program, which includes a seven-day return policy on all Nissan and Venucia brand models on sale in China.

That’s helped the automaker to begin operating two shifts at its Huadu plant in southern China after cutting production following last year’s protests.

“I hope that the government will take appropriate action to make a more amicable solution for the two countries. After that maybe we can have a more optimistic forecast for the Chinese market,” said COO Shiga.

For Japanese automakers, already battling a strong yen and a challenging sales environment in Europe, recovery in China can’t come soon enough.

 

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