Top Japanese car makers lift output in China

Dow Jones Newswires (Tokyo) - Japan's top three car makers increased production in China in the first month of the year compared with the year-earlier, the first production rise since territorial disputes sparked a consumer backlash that hit demand for Japanese brands late last year.

However, the car makers are still cautious about the sustainability of the rebound. The Lunar New Year holiday, which fell in January last year, made the sales gains appear better than they would have otherwise.

Toyota Motor Corp. 7203.TO 3.47% said on Wednesday that production rose 7.4% to 57,200 vehicles in January from the same month a year earlier. Nissan Motor Co. 7201.TO 3.88% and Honda Motor Co. 7267.TO 3.75% also said their output increased by 32% and 20%, respectively.

The results were the first production gains for the three biggest Japanese auto makers since a territorial row over a group of islands in the East China Sea led to boycotts of Japanese goods in September.

The output rebound was in line with a spike in January sales figures released earlier in the month. The three car makers each logged more than 20% sales growth in the month from the same month a year ago, when the Lunar New Year holidays reduced the number of operating days.

Alongside the yen's recent weakening, the renewed momentum in the world's biggest auto market could help to pull Japan's auto industry out of years of doldrums. The March 2011 earthquake and tsunami in eastern Japan and massive flooding in Thailand whacked Japanese car production, adding to the woes created by the yen's rise in the past few years.

Sales and production by Japanese companies have shown clear improvements in the world's biggest car market. Still, a Toyota spokeswoman said it is too early to say Toyota has got back on its feet, and the company needs to monitor demand in the coming months, when the holiday's effect is eliminated.

Toyota earlier said its sales soared 23% in the month from a year earlier, to 72,500 vehicles.

Concerns also remain about continuing political tensions between Asia's two biggest economies.

In an early warning of a possible return to a downturn in February, Kimiyasu Nakamura, head of Nissan's joint venture in China, Dongfeng Motor Co., said sales for the two months through February may fall by 20% from the same period last year, despite the January surge.

Output by Nissan, Japan's second biggest car maker, totaled 99,571. Honda, the third biggest, produced 52,005 vehicles in January.