Japanese car sales may be over the worst after sales languish

After months of poor cross-border relations have hurt Japanese brands sales may rally.

A territorial dispute with China has lead to almost three months of rapid decline in Japanese auto brands’ production and sales. Toyota Motor Corp said October output crashed 61% to just 30,591 units. Nissan Motor Co slashed production by 44% - its biggest decline since 2009 – and Honda Motor Co reported it’s output also tumbled by 54% in the same period.

The record cuts demonstrated just how serious the backlash from the Chinese public was and has even led to Japanese companies pulling back on their global forecasts.

However, data gathered by the China Association of Automobile Manufacturers (CAAM) showed a strong rebound in Japanese brands’ sales which suggests the decline could be bottoming-out. Car sales jumped to 170,200 units in November, up 72.17% month-on-month, although still 36% lower than sales during the same period last year. Overall market share of Japanese brands has also fallen by 0.4% since last year.

Deliveries of Toyota branded cars declined by 22% in November, a marginal improvement on the 49% and 44% drops it saw in September and October.  Deliveries through the first 11 months fell 3% to 749,000 units, meaning the Japanese car giant is now slated to see its first-ever annual sales downturn in China.

Toyota had intended to launch 20 new models by 2016, including two small cars - a three-box sedan and a hatchback - which were to be build at its joint venture with China’s FAW Group Corp.

However, the carmaker has had to delay the launch of a new production line at its plant in Tianjin as result of poor sales. Toyota had hoped the fourth line at the plant, which would produce an extra 200,000 vehicles per annum by late 2014, would bolster sales in the region. The company is also considering a similar delay at its plant in Guangzhou.