Japanese car firms' China sales declines slowing

BEIJING Mon Jan 7, 2013 8:06am GMT

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BEIJING (Reuters) - Japan's automakers saw a slow recovery of sales in China in December as buyers trickled back to showrooms lured by generous incentives, and as the bruising effects of a territorial dispute between the two countries waned.

Nissan Motor (7201.T), the largest Japanese vehicle maker in China, saw the decline in its Chinese sales narrow to 24 percent in December from 29.8 percent in November and 41 percent in October.

Honda Motor Co (7267.T), Toyota Motor Corp (7203.T) and Mazda Motor Corp (7261.T) reported declines of 19.2 percent, 15.9 percent and 26.4 percent, respectively, slower rates of declines than in previous months.

"Japanese cars have a large following in China because of their styling and fuel economy. Sales would continue to improve as long as the island dispute does not deteriorate, but it could take a while for them to recoup their market share," said Sheng Ye, an analyst with industry consultancy Ipsos.

Some Chinese consumers have avoided Japanese cars since violent anti-Japan protests last September after Japan nationalised two East China Sea islands. China claims the islands as its own territory.

In a bid to win back the hearts and wallets of Chinese drivers, Japanese carmakers have compensated owners for damage and injuries during the protests.

Nissan's China venture also offers a new car to any buyer returning a vehicle over a quality issue within seven days of purchase and with mileage below 1,000 km (600 miles). None of the carmakers has said how much the incentives have cost them so far.

Japanese firms' collective share in China's passenger car market rose to 11.7 percent in November from 7.6 percent in October, though was still lower than 19.4 percent at the end of 2011. December market share data is not available yet.

However, growth for all automakers in China is expected to be tepid this year as authorities in China look for ways to curb car buying to help ease the worsening traffic gridlock, while Japan-China tension will continue to hold back Japanese makers.

Last month, Nissan sold 90,400 vehicles in China, bringing its 2012 sales to 1.18 million, down 5.3 percent year on year. The figure includes trucks and commercial vehicles.

Full-year sales at its venture with Dongfeng Motor Group Co (0489.HK) came to 773,000 vehicles, missing its 1 million annual sales target.

Toyota sold a total of 840,500 cars in China last year, down 4.9 percent from 2011. Honda sold 598,577 cars in 2012, down 3.1 percent from 2011.

(Reporting by Fang Yan and Norihiko Shirouzu in BEIJING and Kazunori Takada in SHANGHAI; Editing by Jonathan Standing and Chris Gallagher)

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