SHANGHAI--Top executives of Japanese carmakers attended the April 19 opening of China's premier auto show, taking time out from dealing with parts shortages caused by the Great East Japan Earthquake.
SHANGHAI--Top executives of Japanese carmakers attended the April 19 opening of China's premier auto show, taking time out from dealing with parts shortages caused by the Great East Japan Earthquake.
As the top motor show in the world's largest auto market, the 14th International Automobile & Manufacturing Technology Exhibition (Auto Shanghai 2011) represents a sales promotion opportunity for any automaker.
The presidents of Toyota Motor Corp., Honda Motor Co., Nissan Motor Co. and Mitsubishi Motors Corp. all unveiled new models during appearances at the first major international motor show since the March 11 disaster.
"I was undecided on whether to visit China or not until the last moment, but I finally decided to come as I thought that our mission is to strive to continue to deliver better cars to customers around the world," Toyota President Akio Toyoda said in a speech at the event.
Toyoda's decision to attend the show in this time of emergency is a clear sign of how much importance the auto giant is placing on the Chinese market.
The Toyota group's car manufacturing plants in the Tohoku region were affected by the massive quake and tsunami.
Honda President Takanobu Ito, Nissan President Carlos Ghosn and Mitsubishi Motors President Osamu Masuko were also present at the Shanghai show. All vowed to bring manufacturing operations back to normal as soon as possible.
New vehicle sales in China in 2011 are expected to grow about 10 percent from the previous year to some 20 million units.
Japanese automakers are showcasing new fuel-efficient small cars and electric vehicles as the centerpieces of their exhibits. Their local marketing strategies are focused on the environmental performance of their products.
Honda announced it will begin production of electric vehicles in China in 2012. Mitsubishi Motors said it will begin manufacturing its Global Small, the company's new compact, in China in 2013. Production of the Global Small will first start in Thailand in 2012.
Nissan is set to start producing and selling its remodeled Tiida compact hatchback, unveiled at the Shanghai show, in China at the end of May. China is the largest market for Nissan, accounting for 1.02 million units, a quarter of the company's global sales of 4.08 million units in 2010.
Shortages of parts from Japan could prevent Nissan from ramping up production in China. But the manufacturer went ahead with its plan to announce the launch in China of the new Tiida at the Shanghai motor show.
Concerns are also growing about radioactive contamination of Japanese products due to the accident at the Fukushima No. 1 nuclear power plant.
"In addition to directly communicating the situation concerning our recovery from the disaster, I also wanted to correct misconceptions about the effects of radioactive materials," said Mitsubishi Motor's Masuko. He met with a number of political and business leaders in China and told them that Japanese cars and auto parts are not affected by radioactive materials.
While Japanese carmakers are reeling from damage caused by the calamity, Western rivals are stepping on the gas in their expansion drives in China.
Volkswagen AG of Germany is looking to expand its China operations into Guangdong province, where many Japanese carmakers operate manufacturing facilities. Soh Weiming, executive vice president of Volkswagen Group China, said the German carmaker can become the No. 1 player in southern China and Hong Kong, where Japanese rivals have established a competitive presence.
General Motors Co. of the United States is pursuing an ambitious goal of doubling its sales in China by 2015.
Both VW and GM will roll out electric vehicles in China.
Chinese carmakers, which offer price-competitive compact cars, are also displaying a raft of new models at the Shanghai exhibit.
Parts shortages are likely to force Japanese carmakers to sharply slash production in major overseas auto markets as well.
Following the March 11 earthquake and tsunami, a leading Japanese auto manufacturer told its parts suppliers that its production in China would be around half of normal levels and that no decision had been made on production in Southeast Asia beyond the end of April.
Japan's automakers halted operations at all domestic plants after the disaster hit, but kept overseas plants running using parts on hand.
With demand growing abroad, especially in emerging economies, the automakers have gone to great lengths to keep production lines up overseas.
But the serious parts supply crunch is now beginning to take a toll on operations in the rest of the world. Toyota and Nissan plan to temporarily halt production in North America. Honda is considering the same.
Toyota will also suspend manufacturing operations in Europe. Many Japanese makers are planning production cuts of about 20 percent in China.
Mitsubishi Motors may stop production in China and other parts of the world for one week to 10 days, according to Masuko. The company is finding it hard to maintain normal levels of production in the face of shortages of such parts as semiconductor devices used for engine control.
Japanese global car output could fall to half of normal levels through September, said an auto industry analyst.
(This article was written by Keiko Yoshioka, Seisaku Yamamoto and Yukio Hashimoto.)