Bloomberg News

Nissan Says China Sales to Rise as Anti-Japan Sentiment Wanes

April 20, 2013

Nissan Motor Co. (7201) targets a 16 percent increase in sales at its China joint venture this year as anti-Japan sentiment triggered by a dispute over uninhabited islands wanes.

Deliveries under Nissan’s venture with Dongfeng Motor Co. may increase to 900,000 vehicles this year in China, where the company sells the most cars among Japanese carmakers, from 773,000 units in 2012, Kimiyasu Nakamura, Nissan’s China venture head, said today.

Nissan said retail sales in China rose in March from a year earlier, making it the first of the top three Japanese carmakers to see a rebound in the world’s biggest automobile market. The automaker introduced the new Teana sedan in China in February and is counting on the model to help recoup market share.

Nakamura said the Yokohama-based company’s plan to boost production capacity in China to 2.3 million units in 2015 may take an extra “six to seven months” due to the anti-Japan turmoil since last year.

“Fundamentally our target for market share in China hasn’t been changed at all,” Andy Palmer, Nissan’s executive vice president, said in Shanghai today. “We have already seen a very good recovery trend.”

Islands Dispute

Nissan, Toyota Motor Corp. (7203) and Honda Motor Co. (7267) have been affected by a territorial dispute between Japan and China. Violent demonstrations erupted in China in September over disputed islands in the East China sea. Japanese carmakers have increased discounts and extended guarantees to win back customers.

Nissan in October said it will reimburse owners for damage to vehicles during protests, including future demonstrations. Japanese cars and dealership were torched during the protests.

Sales to dealers in China are expected to rebound within three months, Palmer said in an interview April 3. While wholesale sales declined in March, retail sales increased.

The company is counting on the Teana sedan, introduced in China on Feb. 26, to revive sales in the country. It’s the most profitable of the dozen-plus models the automaker sells in the country, according to Sanford C. Bernstein.

Nissan unveiled a new concept hybrid car, Friend-Me, at the Shanghai auto show. The car, which Nissan said is the first with “key input by Chinese designers,” will be targeted at Chinese consumers in their 20s and 30s.

Longer term, the challenge is “to make sure Nissan is ‘relevant’ to the young generation of Chinese,” Palmer said.

“Very clearly there is a generational shift in China, coming from the one-child policy,” he said, citing the population born after 1980. “We think the needs of these customers are going to change the face of automotive not just in China, but globally.”

To contact the reporter on this story: Ma Jie in Tokyo at jma124@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net


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