At the January, 2013 North American International Auto Show (NAIAS) Lou Ann Hammond, CEO, www.drivingthenation.com, talked to Bob Carter, senior vice president of automotive operations for Toyota Motor Sales (TMS), U.S.A. Inc. At the April, 2013 New York International Auto Show (NYIAS) Hammond talked to Tomohiko Ikeda, Executive Vice President, Fuji Heavy Industries Ltd, Senior Managing Executive Officer, Chief Director of Subaru Global Marketing and Director in Fuji Heavy Industries, Ltd. One of the things we talked about was Japanese car sales in China.
In September, 2012, I wrote in www.drivingthenation.com, “Chinese Automotive Monthly acknowledges that “The Diaoyu island dispute between China and Japan caused by the “nationalization” of Diaoyu Island (editor’s note:known as Senkaku islands in Japan) is becoming more and more disturbing,” but says “The real reason for the drop in market share of Japanese cars in China is the decreasing competitive ability coupled with slow strategy adjustment. With the introduction of a large number of hightech Volkswagen vehicles in China, Japanese compact and midsized cars are being attacked by German or even Korean cars.””
Six months later Japanese car sales are starting to rebound, but have not gained full momentum. Subaru sales, before September, 2012, averaged 4,000 a month. After August, 2012, Subaru’s sales fell below the average of 2,000 a month for September, October and November. Car sales for 2012 decreased 24% from Subaru sales in China for 2011.
Subaru has been observing some recovery as of December, 2012. Every month, except February, Chinese New Year, sales have rebounded to 4,000 a month. Subaru has not announced a new joint venture and is still not producing in China, so we are able to compare apples to apples, before the island dispute and after the island dispute.
Bloomberg’s Businessweek.com put it best in their November, 18, 2012 article, “While it’s Japanese peers idled factories in China last month as deliveries slumped, Fuji Heavy was able to ship more cars to the U.S. and Japan, where waiting times have stretched to six months for it’s $25,495 BRZ sports car and two months for the $17,895 Impreza hatchback. The demand helped the Tokyo-based carmaker boost it’s full-year profit forecast by 40 percent even as Honda and Nissan cut theirs by a fifth.”
Masashi Uemura, Deputy General Manager, Corporate Communications Department, Investor Relations, FUJI HEAVY INDUSTRIES LTD., is still hesitant, “We have been observing some recovery from this January. Howe’ver we are still monitoring carefully the sales situation in China, since we understand our sales momentum has not yet fully recovered. Sales drop in February was due to Chinese New Year holidays and on plan. Our annual sales plan in China for CY2013 is about 58,000 unit’s.”
A gain of over 30% over 2012 would seem good at first blush, but Subaru is projecting about the same sales as calendar year 2011. In a market that analysts are predicting a 7% growth, and China Automotive Monthly predicts 9.9%, that means Subaru is losing ground.
Reuters reported that, “Earlier this week, Nissan Motor Co <7201.T> said it’s sales were down 15.1 percent year-on-year in the three months to March, while Toyota Motor Corp’s <7203.T> fell 12.7 percent and Honda Motor Co’s <7267.T> decreased 5.2 percent.”