Japanese car output shrinks in China amid isles dispute

Production of Japanese cars has slashed in China amid a territorial dispute between Tokyo and Beijing over a group of islands in the East China Sea.

Three of the Japanese car manufacturers said on Thursday that output in China plunged again in October with Toyota, the world’s best-selling carmaker in the first six months of the year, producing 61 percent fewer cars in China year-on-year.

Nissan and Honda cut production by 44 percent and 54 percent respectively.

Toyota produced just 30,600 vehicles, while Honda produced 26,302 and Nissan 61,360.

Nissan CEO Carlos Ghosn said in October that his company would think twice before making new investments in China.

“Certainly beyond what we have decided, before going for further decisions in China, we will be very careful in assessing how much of an impact (the political situation) has on consumers’ minds,” Ghosn stated.

Tokyo and Beijing have long been in a dispute over the sovereignty of the islands, known as Senkaku in Japan and Diaoyu in China, which would give the owner exclusive oil, mineral and fishing rights in the surrounding waters.

Tensions heightened between the two countries after Japan signed a deal on September 11 to buy three of the islands from their private Japanese owner in line with plans to nationalize the archipelago. Hundreds of Chinese held anti-Japan demonstrations following the move. The protesters called for the boycott of Japanese products.

In September, Chinese Deputy Minister of Commerce Jiang Zengwei said Beijing saw no problem in peaceful boycotts of Japanese products.

China is Japan’s largest trading partner. In 2011, bilateral ties between Tokyo and Beijing reached 345 billion dollars in value.