China: Were Japan car makers' sales hurt by territorial dispute?

The Wall Street Journal (Shanghai) - Some Japanese auto makers bucked an otherwise positive August for auto sales in China, and an industry group executive cited the potential ripple effects from a territorial dispute over islands in the East China Sea.

Sharp discounts ensured that auto sales in China grew at their fastest pace in five months in August, and a domestic industry group said it expects sales in the world's largest car market to remain brisk in the final months of this year.

But some Japanese car makers fared poorly. Mazda Motor Corp.'s sales in China fell 6% from a year earlier to 16,539 vehicles in August, while Toyota Motor Corp. and its Chinese partners sold about 75,300 cars last month, down 15% from a year earlier.

At a press conference on Monday, Dong Yang, secretary general of the state-backed China Association of Automobile Manufacturers, linked slowing sales of Japanese cars to the countries' growing diplomatic tussle over islands in the East China Sea, called Senkaku in Japan and Diaoyu in China.

"I don't want to comment much but I guess Japanese brands sales slowed in August mostly due to the Diaoyu issue," Mr. Dong said.

In a move likely to heighten tensions between the Asian neighbors, the Japanese government on Monday said it had decided to nationalize the group of islands.