Toyota Motor Corp. (7203)'s China sales surged in the first month since a territorial dispute between Asia's two biggest economies resurfaced, showing Japanese brands are escaping the type of consumer backlash they faced last year over a group of uninhabited islands. Deliveries to China rose 41 percent to 89,800 vehicles in November, raising the 11-month total to 809,000, according to a statement from the Toyota City, Japan-based company yesterday. That means that the maker of the Camry will post record sales in the world's biggest auto market this year unless they plunge 18 percent this month. Toyota's gains were mirrored by Nissan Motor Co. (7201), Honda Motor Co. and Mazda Motor Corp. (7261), illustrating the contrast in the economic fallout between last year's diplomatic row and this year's. China created an air-defense area covering the islands last month, reviving memories of last year and underscoring how Japanese companies remain vulnerable to periodic bouts of tensions between the two Asian neighbors. "The pressure on Japanese automakers will always be there," said Harry Chen, a Shenzhen-based analyst at Guotai Junan Securities Co. "They need to find the best way to cope with it given that China is a must-have market for them." China has sent fighter planes into the self-declared zone after announcing its creation on Nov. 23 and said its military will take "defensive emergency measures" if aircraft enter the area without reporting flight plans or otherwise identifying themselves. Military Flights The State Department on Nov. 29 urged U.S. airlines to notify Chinese authorities before flying through the defense zone, even as the American military conducts daily flights in the area without such notification. Japan has told its airlines to stop providing flight plans to China. Last year, the dispute flared after the Japanese government decided to purchase the islands from their private owner, triggering protests across China, with some demonstrators torching dealerships and vandalizing cars associated with Japan. Toyota and Nissan posted their first annual sales declines in China following the riots. Nissan's sales in China jumped 96 percent to 131,800 vehicles last month, while Mazda increased deliveries by 68 percent to 20,465, according to data from the companies. Honda doubled its sales from a year earlier to 83,013. Nissan, which sells more cars in China than any Japanese automaker, has fully recovered from the anti-Japan consumer backlash, Ren Yong, vice president of Dongfeng Motor Co., said Nov. 21 at the Guangzhou auto show. Toyota's luxury Lexus division is seeing "steady, good growth" in China and will post record sales in the country this year, Mark Templin, an executive vice president, said last month. Source: Bloomberg
