SHENYANG, Oct. 26 (Xinhua) -- Japanese auto makers are reeling from a crisis in China. The latest sign is that they were asked by organizers not to attend the auto show in northeast China.
The absence of Japanese carmakers from the six-day auto show, which ends Sunday in Shenyang, capital of Liaoning Province, comes amid the lingering Diaoyu Islands dispute between the two Asian neighbors.
"Two days before the show, the organizing committee notified us to retreat from the expo," said Qi Lin, marketing manager of Guangqi Honda in Shenyang.
Clearly, this is a result of the Diaoyu Islands issue and the political climate between the two Asian giants is taking a bigger toll on the economy, said Qi.
In a promotion campaign in June, the organizers still said various brands, including those from Japan, would take part in the show that has an exhibition area of 150,000 square meters, the manager said.
The booths for Japanese brands are now being used to show auto parts and classic cars. Visitors are being advised to go directly to dealers to buy cars of 10 Japanese brands.
At auto shows over the past years, Japanese auto makers rent large exposition booths to attract potential Chinese buyers with new models. Many customers would sign purchase deals at the show.
"From past experience, Japanese brands could account for one third of all sales at the auto show," said Qi.
This was an epitome of the dominant position that Japanese carmakers had in the world's largest auto market. Auto firms, however, saw sales fall sharply last month becoming victims to deteriorating Sino-Japanese relations.
Bilateral relations worsened after the Japanese government announced to "purchase" part of the Diaoyu Islands on Sept. 11. The move enraged many Chinese and led some to boycott Japanese goods.
The auto industry is one of the sectors hardest hit. Many potential Chinese car buyers have shunned Japanese brands because their cars are an easy target during anti-Japanese protests.
An auto show visitor, who declined to be named, said if he bought a Japanese car, he would be worried as the car could be damaged if Sino-Japanese relations worsened.
Sales of Japanese cars, excluding imported ones, slumped 40.8 percent year-on-year last month, according to the China Association of Automobile Manufacturers.
The sales decline reportedly prompted Toyota to temporarily halt or cut production at China plants.
While hitting Japanese auto companies, the islands dispute benefited brands from other countries. Sales of Germany, U.S., South Korean and French brands in September rose at annual rates of 13.8 percent, 15.1 percent, 9.4 percent and 9.2 percent, respectively, statistics from the association showed.
Although the Chinese government did not order the government agencies or citizens to boycott Japanese goods, "the desire of Chinese consumers to buy Japanese goods has obviously lowered. I even heard some scrapped deals," said Ryoji Takagaki, deputy consul general of the Consulate-General of Japan at Shenyang.
No Japanese businesses have retreated from northeast China in the wake of the Diaoyu islands dispute, said Takagaki. "But facing weak demand and rising labor costs, Japanese firms will have to consider shifting eyes to ASEAN member states," he said.
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