Toyota, Nissan, Honda brace for violent protests over control of islands claimed by Japan, China

Detroit Free Press - Two years ago, Sherry Wang bought a Toyota Camry because it offered a comfortable way to commute to her job as a researcher in the Chinese city of Xi'an. Lately, she's been taking the bus.

"I'm afraid that my car or I will become a target" of anti-Japanese protesters, who have thronged China's streets in recent days, Wang said. "I just hope life will get back to normal as quickly as possible."

Wang illustrates why Toyota, Nissan and Honda are bracing for what may become a bigger crisis in China than last year's tsunami in Japan. As violent protests over control of islands claimed by both nations flare up, China's Passenger Car Association predicts Japanese brands will lose their lead over German nameplates in the country for the first time since 2005.

"The repercussions for Japanese carmakers are very serious and will last for a long time," said Cui Dongshu, deputy secretary general of the Passenger Car Association. "There are plenty of choices. Why bother with Japanese brands if there are concerns of safety due to anti-Japan sentiment?"

Consumers shunning Japanese models may turn to market leaders General Motors, which this year has sold 1.84 million cars in China under brands including Buick, Chevrolet and Cadillac, and Volkswagen, whose two joint ventures have sold a total of 1.49 million vehicles this year. The Japanese leader, Nissan, has sold some 485,000 vehicles in China so far this year.

Toyota, Nissan and Honda have reported attacks on their dealerships in the eastern port city of Qingdao and halted production at Chinese plants. Suzuki suspended operations at its motorcycle factory.

Officials at Nissan, Toyota, Honda, Suzuki, Mitsubishi and Mazda said they're assessing the situation in China.

While automakers have been among the hardest-hit Japanese companies, the diplomatic crisis puts at risk bilateral trade in goods ranging from rice to tractors that has tripled in the past decade to more than $340 billion.

The tensions also further complicate policymakers' efforts to fortify growth in Asia's biggest economies as the European debt crisis saps demand for exports.

The protests center on a decades-long dispute over a group of islands, known as Diaoyu in China and Senkaku in Japan. Tokyo Gov. Shintaro Ishihara reignited the row in April when he said he may use public funds to buy the islands. Protests in China have since escalated, with some demonstrators torching auto showrooms and smashing Japanese-branded vehicles.

Thousands of protesters marched in Chinese cities Tuesday on the 81st anniversary of the Manchurian Incident, an attack on a Japanese railway that historians say was used as an excuse for Japanese soldiers to invade China.