Market for Japanese Cars in China Dries Up

The territorial dispute between Japan and China over a set of islands continues to hurt Japanese automakers. Their sales in China dwindled in September as trade between the two countries has faltered.

Toyota Motor Corp. (NYSE: TM) saw its sales in China cut nearly in half to a mere 44,100 units sold last month. Honda Motor Co. Ltd. (NYSE: HMC) reported that its sales in September totaled 33,931, which was 40.5% lower than a year ago, as well as down from 57,003 units in August.

Nissan said that its sales in China declined 35.3% year over year to a little more than 76,000 cars sold. Sales of Mazda vehicles dropped by 35% last month to 13,258 units.

And Mitsubishi, a smaller player in the People's Republic, said that it sold only 2,344 models there in September, or about 41% less than in the previous year.

As Chinese drivers turn away from Japanese cars, that may be good news for other automakers, such as General Motors Co. (NYSE: GM), Ford Motor Co. (NYSE: F) and Volkswagen, as they increasingly rely on the world's largest auto market to offset weakness in Europe and other parts of the world.

The rise of anti-Japan sentiment in China comes as the two nations tussle over a set of uninhabited islands in the East China Sea that are claimed by Japan, China and Taiwan. The islands, known as the Senkakus in Japan and the Diaoyu islands in China, are rich in natural resources such as oil and sit in popular fishing waters.