Effect of Anti-Japanese Sentiment on Inland Buyers

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Disputes over some islands in the Pacific between Japan and China have affected sales of Japanese automobiles in China. Rioting, anger, and violence toward the Japanese has prompted some Chinese to react hostilely toward Japanese cars and their owners, in some cases, leaving the owners severely injured. Anti-Japanese sentiment coupled with fear of violence and vandalism has removed some incentive to buy Japanese cars. In August, Japan’s automakers accounted for 15.2% of auto sales in China, a figure that has shrunk from 17.6% in July.

To help assuage Chinese car buyers, Japanese car companies have been making assurances of aid for vehicle repairs to customers injured in violence related to their vehicles and cash compensation for cars damaged by mobs.

But despite this disappointing news for Japan’s automakers, auto sales in China actually rose 11% in August, reflective of targeting more inland Chinese buyers. Looking forward Japanese carmakers may suffer in these largely untapped markets because they may not ingratiate themselves with buyers at this critical juncture.Sources: WSJ

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One Response to Effect of Anti-Japanese Sentiment on Inland Buyers

  1. China has just gone through a leadership change; Japan completed its election cycle this summer. In both cases leaders waved the red flag (literally, in the case of China). It doesn’t help that Chinese youth are indoctrinated with a very partial history in school, which ignores the civil war of the 1940s (though it quieted during the Japanese invasion) and allows young Japanese to be painted as copies of their grandfathers or great-grandfathers ready to rape and pillage Asia again. (There is also a long history of these islands, whose only permanent settlers were Japanese, and the domestic politics ignores that they lie close to Taiwan and not China proper.)

    The article however fails to point out that the Japanese auto firms were late in building operations in China – GM and VW are the overwhelming market leaders. It would also be interesting to know whether there are regional differences; Honda exports from its plant in Guangzhou (just inland from Hong Kong), whereas the other firms focus on China’s domestic market. Furthermore, markets are still regional, there remains a “buy local” orientation. For that a Honda vs Toyota comparison would also be helpful, because my sense is that Toyota operates in areas where there are more local options.