Toyota, Honda, Nissan - Ditch China, come to India

[trackwhack]

Japanese Car Plants in China: Who's Feeling the Heat? - China Real Time Report - WSJ

Even if the situation is resolved, how long until the next shutdown? Come to Tamil Nadu, Come to Sanand. The infrastructure exists and is being bettered everyday. Look at Hyundai's successes.

Japanese Car Plants in China: Who's Feeling the Heat?

Explosive anti-Japanese sentiment in China forced Toyota 7203.TO +0.48%, Honda and Nissan to idle factories across the country this month. Media reports suggest that fresh shutdowns may be coming again in October.

Halting production is never good news. But who's got the bigger headache – the Japanese or the Chinese?

There is no question that Toyota, Nissan and Honda will lose sales and market share to competitors. It's already happening. And lost sales matter because China accounts for 15% of global profits at Toyota and Honda and as much as 25% at Nissan.

And yet, the pain could become even greater for China.

All Japanese cars made in China are produced at joint-venture factories owned on a 50-50 basis with Chinese partners. When the plant doors close, Chinese executives who run those joint ventures will immediately confront two frightening realities: a dramatic drop in revenue and tens of thousands of idle workers.

Take Hong Kong-listed Guangzhou Automobile Co for example. GAC, a subsidiary of the powerful Guangzhou municipality, runs world-class car assembly joint ventures with Honda and Toyota that employs just under 13,000 people.

Guangzhou Honda and Guangzhou Toyota also buy car parts from hundred of suppliers based in Guangdong province that employ tens of thousands of more people. Honda and Toyota products are sold through more than 900 dealers owned by Chinese business people. Count several more thousands of jobs there.

As China steps its way through a delicate political transition expected to formally begin in October, the last thing the leadership in Guangzhou wants to deal with is a crush of workers with too much time on their hands. If an argument between workers at a Foxconn 2038.HK +0.78% plant in Taiyuan can trigger rioting by thousands, imagine what might happen should Guangzhou workers start wondering about future job security.

Guangzhou Automobile isn't an isolated case.

Central government-owned First Auto Works, Dongfeng Motors and Changan also run joint ventures with Honda, Toyota, Suzuki and Nissan. Because Chinese consumers like Japanese cars – they will buy close to three million this year – these joint ventures make a lot of money, with annual profits in the billions of dollars. When production stops, so does the cash flow.

Chinese government co-ownership with the Japanese puts the squeeze on Chinese managers at the joint ventures in still another important way. The top Chinese executives are Communist Party members and car company managers at the same time. As such, they find themselves in the awkward position of publicly endorsing anti-Japanese protests while privately hoping for the episode to pass quickly. If they try to discourage anti-Japanese sentiment, they could be seen as cowards, even traitors. But not tamping down the tensions could very well cost them their livelihoods, too.

Sooner rather than later, look for the leadership in Beijing to develop a fresh narrative for everyday Chinese consumers: "The islands are clearly an issue of national sovereignty. And while the country's leadership focuses on resolving this immensely important conflict with Japan, it's fine for you to go out and buy that new Accord or Camry."

 

[Bangalorean]

Hyundai has been a massive super-duper success in India, both in terms of manufacturing and sales. The Koreans sure know a thing or two about intelligently using local men and material and building world class stuff.

Toyota also has a fairly decent presence in India, in Bangalore to be precise. This is the time for Indian babus and businessmen to show some business acumen and invite the Japanese to diversify their production.

 

[cir]

go go go。that's 2 million cars a year。hope the Indian market expands enough to absorb the extra supplies in short order。

in the meantime，the Chinese market can be shared by Chinese，European、Korean and American producers。

a happy ending for all。：-）

 

[Defcon 1]

go go go。that's 2 million cars a year。hope the Indian market expands enough to absorb the extra supplies in short order。

in the meantime，the Chinese market can be shared by Chinese，European、Korean and American producers。

a happy ending for all。：-）

Indian market is around 2.5 million cars a year, and we are growing.

 

[Bangalorean]

go go go。that's 2 million cars a year。hope the Indian market expands enough to absorb the extra supplies in short order。

in the meantime，the Chinese market can be shared by Chinese，European、Korean and American producers。

a happy ending for all。：-）

Hey, if you are going to boycott their products anyway, they really have nothing to lose, do they?!

Now, all you have to do is to continue claiming Korean dynasties as your own, and infuriate the right-wing Koreans more and more. The Christian right-wing in Korea already detests China for that - please convert this sentiment into majority sentiment in Korea!! Go, go, go!!!

 

[Armand2REP]

Toyota also has a fairly decent presence in India, in Bangalore to be precise. This is the time for Indian babus and businessmen to show some business acumen and invite the Japanese to diversify their production.

Pretty much all foreign car manufacturers in China are there to sell to China, this is especially true of Japanese car makers. You cannot import autos to China without massive tariffs so they have to be made in the country. Moving production to India will not get your auto sold in China. The only long term repercussions from this would be Japanese brands being shunned by Chinese consumers and the closure of lines that make them in China. Also the lack of orders for parts that equip such cars.

 

[Bangalorean]

Pretty much all foreign car manufacturers in China are there to sell to China, this is especially true of Japanese car makers. You cannot import autos to China without massive tariffs so they have to be made in the country. Moving production to India will not get your auto sold in China. The only long term repercussions from this would be Japanese brands being shunned by Chinese consumers and the closure of lines that make them in China. Also the lack of orders for parts that equip such cars.

I see.. I was under the impression that it was export-oriented.

 

[Tolaha]

^^ China is the world's largest automobile producer. However, Indian passenger car exports are almost 5 times that of China! These two statements tells you a nice story!

 

[trackwhack]

go go go。that's 2 million cars a year。hope the Indian market expands enough to absorb the extra supplies in short order。

in the meantime，the Chinese market can be shared by Chinese，European、Korean and American producers。

a happy ending for all。：-）

I'd like to see how long China keeps selling false pride to their citizens. How long can you sustain your anti japanese sentiment. Not very long. You will eventually swallow your pride and continue trade. If you do manage to sustain it, excellent, the japs will eventually take their money and leave.

Pretty much all foreign car manufacturers in China are there to sell to China, this is especially true of Japanese car makers. You cannot import autos to China without massive tariffs so they have to be made in the country. Moving production to India will not get your auto sold in China. The only long term repercussions from this would be Japanese brands being shunned by Chinese consumers and the closure of lines that make them in China. Also the lack of orders for parts that equip such cars.

I realize that. Two points however.

China cannot maintain export tariffs indefinitely. It can only last as long as the manufacturing costs competitiveness remains. When that is erased, Chinese tariffs on its imports will draw similar tariffs on its exports. I mean these already exist, but currently its offset by lower manufacturing costs. So the tariff situation cannot last forever.

Secondly, these companies coming to India brings investment and increases gross productivity. It does not matter where the end market is (export / domestic)

 

[no smoking]

Hey, if you are going to boycott their products anyway, they really have nothing to lose, do they?!

In 2012, from Jan to Aug, China imported 120billions from Japan while exporting 98.6billions to Japan. With 31.4billins surplus, yes, Japanese got a lot to lose!

Now, all you have to do is to continue claiming Korean dynasties as your own, and infuriate the right-wing Koreans more and more. The Christian right-wing in Korea already detests China for that - please convert this sentiment into majority sentiment in Korea!! Go, go, go!!!

Yes, so they will start a war against China tomorrow or they shut down the trading relationship with China? Since when a country's politics is decided by an academic topic?

 

[arya]

here few indian think they can stop war with increasing economy business

 

[Armand2REP]

I realize that. Two points however.

China cannot maintain export tariffs indefinitely. It can only last as long as the manufacturing costs competitiveness remains. When that is erased, Chinese tariffs on its imports will draw similar tariffs on its exports. I mean these already exist, but currently its offset by lower manufacturing costs. So the tariff situation cannot last forever.

Secondly, these companies coming to India brings investment and increases gross productivity. It does not matter where the end market is (export / domestic)

China's import tariffs can remain indefinetly. They don't have to allow foreign made car imports access to the Chinese market. How that protectionism was never challenged in the WTO is beyond me, but that is the way it is.

Secondly, Japanese car manufacturers won't move out of China to somewhere else because they can't sell to China without making them in China. None of that production will move to India. Any new factories will be for the Indian market.

 

[amoy]

China's import tariffs can remain indefinetly. They don't have to allow foreign made car imports access to the Chinese market. How that protectionism was never challenged in the WTO is beyond me, but that is the way it is.

The above is a very misleading statement
Import Car Show showcases foreign cars to Chinese buyers - China.org.cn 2011

And according to customs data, sales of imported cars rose 42 per cent, year on year, to 234,000 units in the first quarter this year.

----------------------------

Secondly, Japanese car manufacturers won't move out of China to somewhere else because they can't sell to China without making them in China. None of that production will move to India. Any new factories will be for the Indian market.

After so much violence over Japanese-brand cars sales of Jap. brands is bound to decline. U may say consumers are intimidated. Yes that'd be a big factor in buying decisions.

Japanese Factories Halt Production In China As Island Dispute Escalates - One News Page
Toyota chairman to visit China

 

[Armand2REP]

The above is a very misleading statement
Import Car Show showcases foreign cars to Chinese buyers - China.org.cn 2011

And according to customs data, sales of imported cars rose 42 per cent, year on year, to 234,000 units in the first quarter this year.

Actually, the statement you made is very misleading. 234,000 units out of an 18 million unit market is not even worthy of mention. Those vehicles are six figure luxury brands only the super rich who do not care about tariffs can afford.

After so much violence over Japanese-brand cars sales of Jap. brands is bound to decline. U may say consumers are intimidated. Yes that'd be a big factor in buying decisions.

Chini xenophobia has reared its ugly head again... it was only a matter of time.

 

[Singh]

This is not a zero sum game. China is the world's largest automobile market, Japanese cannot ignore that.

 

[Zebra]

This is not a zero sum game. China is the world's largest automobile market, Japanese cannot ignore that.

Indeed, very true, it is not a good idea to ignore Chinese Car Market.

But what if Chinese customer OR people are not ready to accept the Japanese car makers in China.

Just bcz of Island's issues if they keep hammering the Japanese again and again in China, then there is no other way left for the Japanese car makers.

Correct me please, if I am wrong.

 

[amoy]

Subscribers to conspiracy theories might agree what happens is intended to snatch Japanese auto makers' market share which used to be around 25%, followed by German, American and Korean makers.

Toyota, Nissan, Honda, Suzuki


Source: 2010上半年各汽车品牌中国市场占有率 - Oriony的日志 - 网易博客

 

[Singh]

Indeed, very true, it is not a good idea to ignore Chinese Car Market.

But what if Chinese customer OR people are not ready to accept the Japanese car makers in China.

Just bcz of Island's issues if they keep hammering the Japanese again and again in China, then there is no other way left for the Japanese car makers.

Correct me please, if I am wrong.

If you read the Article and see the posts on first page. Chinese and Indian car markets are mutually exclusive.

If Japanese are to sell their cars in China, they have to manufacture it locally with a Chinese partner, they can't export them from say India. If Chinese don't want to buy Japanese then too bad.