Report: Honda, Nissan, Mazda, Toyota to cease production in China after territorial dispute provokes civil unrest

Being of Chinese descent myself, this bit of news isn’t surprising to me. For a little cultural enlightenment, the Chinese and Japanese have always had a general distaste for each other and this has resulted in a clash that’s been embedded in Asian history for centuries. Despite the progression in society, this animosity towards one another still exists in various forms, thankfully however, without the advent of actual war.

And this latest report from Reuters is an example of that. The world-renown news agency reports that five Japanese manufacturers of consumer products have been forced to cease production in the Chinese market due to a rather major territorial dispute.

Those five companies are Panasonic, Canon—and in relevance to the auto industry—Honda, Mazda, Toyota, and Nissan.

The territorial dispute apparently involved a set of islands called the Senkaku by Japan. China chooses to name the island chain Diaoyu.

“The gravely destructive consequences of Japan’s illegal purchase of the Diaoyu Islands are steadily emerging, and the responsibility for this should be born by Japan,” said Chinese Foreign Ministry spokesman Hong Lei at a news briefing.

In essence, in China’s eyes, the Japanese illegally purchased the islands and as a result, the largest outbreak of  anti-Japan sentiment broke out in the country this past weekend. Demonstrations and even violent attacks were reported to occur against the five aforementioned Japanese manufacturers, which ultimately has led to their suspension of operations.

Potentially exacerbating the anti-Japan sentiment in China is the anniversary of Japan’s 1931 occupation of various parts of mainland China, which then led to the Second Sino-Japanese War—a more focused conflict that took place simultaneously with Japan’s involvement in World War II.

To further illustrate the growing tensions, the Japanese government has warned citizens of this upcoming anniversary, which could lead to major civil unrest in parts of mainland China where there are high concentrations of Japanese influence. As a result, many Japanese schools across China have cancelled classes this week.

As for the automobile brands, Toyota Motor Corp and Honda Motor Co reportedly announced that arsonists in the eastern port city of Qindao, China severely damaged their dealership stores. Though Toyota also said that as of this Monday, factories and offices were operating normally.

Honda announced that they’re suspending production in China beginning Tuesday for two days. Mazda also announced the same with its Nanjing factory, which works in conjunction with Chongqing Changan Automobile Co. and Ford Motor Co. And lastly, as of Monday, Nissan Motor Co suspended production in China for two days.

“I want to leave,” a Nissan executive reportedly told Reuters, “Protests near my home were horrifying over the weekend.”

Reuters also reports that the US has reportedly said that they will continue to stand by its security treaty obligations to Japan, however the US will not take a side in this conflict.

It will be a bit nerve wracking to watch this conflict unfold as this is a political conflict that has the potential to significantly affect the world economy, particularly with trade and consumer products—a vast majority of the world’s automobile market share belongs to the Japanese auto makers and simultaneously, China currently represents the fastest growing automobile market since the United States.

– By: Chris Chin

Source: Reuters, AutomotiveNews