More dealerships drop Japanese brands
San Francisco, CA -- (SBWIRE) -- 12/17/2012 -- Over three months following the start of riots surrounding the Senkakus dispute, Japan's top automakers are attempting to lure back buyers. Unfortunately for the companies, some dealers will require much more persuading than others.
"Sales of Japanese brands plunged about a third at my outlets," said William Chen, whose family owns around 30 showrooms selling Nissan vehicles and nine other brands in the eastern city of Taizhou. "I would prefer safer brands over Japanese ones in the future."
Distributors are quitting on even considerations regarding the Japanese car brands, says a state-backed Chinese Automobile Dealers Association.
The inability to sign enough dealers will cut deep into Japan's automakers as they must now focus on smaller markets within the country. The happenstance is a welcome turn of events for General Motors Co., Volkswagen AG, and Hyundai Motor Co.
"It's definitely going to affect Japanese carmakers' expansion," said Ivo Naumann of Shanghai-based strategy adviser AlixPartners. "If dealers had to choose between say, Toyota and Volkswagen, why would they choose a Japanese brand if they have to deal with (possible similar flare-ups) every two or three years?"
Close to 2,000 japanese car models were damaged when anti-Japanese protests broke out in China, following the dispute over island territory, according to the Guangzhou Automobile Group Co.
South Korean, German, and United States brands are all gaining in shares as Japan drops off.
A Toyota and Honda dealership was burned down in Qingdao. The owner of the company lost 80 million yuan, said Netease.com.
That case was extreme, however there were many cars vandalized or partially destroyed in wide-ranged protests across the country.
A Beijing Toyota dealership discontinued the sales of Japanese cars in November.
"I have never seen so many dealers desert the Japanese brands," said Luo Lei, deputy secretary general of the car dealers association. "The psychological impact on buyers and dealers is unparalleled. Automakers have to figure out a way to address it, otherwise it will do long-term harm.”
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