Toyota Motor’s (TM, Financial) sales in China is seeing good improvement. Along with its two Chinese joint venture partners, Toyota sold 78,500 vehicles in August in the emerging nation, which is up 8.9% from a year earlier. The company has tie ups with China FAW Group Corp. and Guangzhou Automobile Group through which it operates in the mainland. This year on year increase in sales must have brought a smile on investors’ faces after the Japanese automaker saw a 1.1% sales drop in July, and 7.6% sales decline in June.
Healthy sales lift the mood
The top global automaker has sold more than 619,200 vehicles in the first eight months in China, an increase of 9.7% from last year. Toyota gives its new generation Corolla the credit for healthy August figures. The company is marketing the refreshed Corolla such that it is able to strike the cord of the young Chinese car buyers.
The company aims to sell more than 1.1 million in the current year. If the company is able to accomplish this target then it would be the first time that Toyota would cross the 1 million sales mark in China, the hottest car market in the world. The company had originally targeted to touch the 1 million mark in 2010. In 2013, the Toyota had sold 917,500 vehicles in the country.
Japanese peers still see depressed sales
While Toyota’s sales rise might have indicated that the Chinese population is gradually opening up to purchasing Japan-made products, Nissan (NSANY, Financial) and Honda (HMC, Financial) are still witnessing declining sales. Last month Nissan sold 85,500 vehicles in the country, down 0.7% from last year. Honda Motor too, suffered a 5.5% fall in sales by selling 52,513 vehicles during the month.
However, these numbers are better than what the two carmakers reported in the month ago. In July, Nissan’s sales plunged 12.5%, while Honda encountered a steep decline of 23% over last year comparable period. Both Toyota and Honda have said that they expect to hit an overall 20% hike in sales volume in the current year. So far this year through August, Toyota’s sales are up 9.7%, Honda’s is up 5.2%, and Nissan’s sales volume chart is up 13%. The way things are developing considering the current pace of sales, its remains doubtful whether these Japanese auto giants will be able to meet their individual set targets for the year. But what’s surprising is that none of the automakers have altered their yearly guidance as they expect to meet their targets.
Toyota said that slower improvement in sales have been on account of increased competition from fellow players and model alterations. German premium brands are marketing their entry level cars, and this is hurting the sales of Japanese cars including Honda Accord, Toyota Camry and Highlander. Nevertheless, Honda expects sales to shoot up considerable in the remaining year as it plans to launch refreshed and new models which include the Spirior, Odyssey, and Vezel. It also plans to properly promote these vehicles to increase its charm and awareness. Nissan, on the other hand, said that to boost sales the company is undertaking heavy marketing strategies, some of which include arranging roadshows in smaller cities to reveal the carmakers latest technologies.
Parting thoughts
The Japanese carmakers have not yet totally recovered from the Beijing and Tokyo clash over a group of islands. The Chinese population had shunned Japan made products including cars. Though the incident took place a couple of years, it is continuing to have a bearing on Japanese car sales. However, gradual recovery, though at a slow pace, has been noticed over the time. What remains to be seen is whether the trio meet their target sales for the year.
