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Toyota China sales tumble as islands ‘row’ hits Japan Inc Japan insurers stop China riot coverage: report

BEIJING, Oct 5, (Agencies): Toyota Motor Corp’s China sales fell about 40 percent in September from the year before, while those of rivals such as Hyundai and BMW jumped, underscoring how badly Japanese brands have been hit by a territorial row between the two countries. Showroom traffic and sales have plunged at Japanese car makers since violent protests and calls for boycotts of Japanese products broke out across China in mid-September over the Japanese government’s purchase of a group of disputed islands in the East China Sea from their private owner.

A prolonged sales hit of this scale could threaten profit forecasts at Toyota, Nissan Motor Co and others as China, the world’s biggest car market, makes up a bigger portion of their global sales. Toyota sold about 50,000 cars in China in September, a senior company executive, speaking on condition of anonymity, told Reuters on Friday. That would be down from about 86,000 in September 2011 but better than the figure reported earlier by Japan’s Yomiuri newspaper, which said sales halved from the 75,000 sold in August. The dramatic fall-off in demand for Japanese vehicles has been an unexpected boon for other foreign brands, with South Korea’s Hyundai Motor Co saying on Friday its China sales climbed 15 percent to 84,188 vehicles last month.

Big Japanese insurers have stopped covering firms against riots in China, a report said Friday, a move seen likely to hit investment there as the countries remain stuck in a festering territorial row. Major non-life insurers, including Tokio Marine and Nichido Fire Insurance, had been selling policies that cover damage from strikes, riots and civil commotion. But they have stopped accepting new applications for such riders or requests for expanded coverage since protests targeting Japanese businesses erupted in cities across China, the Nikkei newspaper said.

Japan Airlines said Friday it would extend temporary cuts in its service between Japan and China because it sees no upturn in demand as a territorial row between the two countries rumbles on. The Japanese flag carrier had initially said it would reduce the number of flights from Oct 10 to 27 on three routes — Tokyo’s Narita Airport -Beijing, Narita-Shanghai and Kansai-Pudong — to cope with the drop off. But the airline said it would extend the reduction by three weeks to Nov 17. “Future booking forecasts do not indicate recovery in the immediate short-term following the initial temporary schedule adjustment.”

The number of Narita-Beijing flights has been slashed from two to one and Narita-Pudong flights from three to two. On the Osaka-Pudong route, the number of weekly flights has been cut from 14 to nine.
The dispute over a group of islands, called Senkaku in Japan and Diaoyu in China, flared after the Japanese government nationalised some of them on Sept 11, sparking violent demonstrations in Chinese cities. Japanese factories and businesses have been targeted, while there have also been reports of physical assaults on Japanese nationals in several areas including Hong Kong.

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