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NEWS
Japanese brands struggling in China
Survey reveals on-going anti-Japanese sentiment among China's consumersCurrent and historic geo-political tensions between China and Japan are having a profound effect on consumer sentiment in the world's fastest-growing car market, a recent study has revealed.
Bernstein Research, in partnership with Chinese website Autohome, conducted a survey of 40,000 respondents in China, only to find that 51 per cent would not consider buying a Japanese car. In a report published by the Wall Street Journal the reason given by half of those respondents answering in the negative was 'anti-Japan feelings'.
The Japanese companies – and their Chinese joint venture partners – have been working overtime to placate Chinese consumers. But their efforts are being constantly undermined by the military posturing of the two nations.
Both sides – and Taiwan, which considers itself a sovereign state – are wrangling over the disputed Diaoyu/Senkaku Islands, which are strategically important and close to untapped oil reserves and fisheries. The islands are located 170km north-east of Taiwan and a similar distance north-west of the Japanese island Ishigaki. As recently as last week the Japanese revealed plans to build new outposts on the islands, merely serving to deepen the divide between the two nations – a divide that can be traced back to the Japanese invasion of China in 1937, and earlier.
Sales in car-starved China have been consistently on the rise, including sales volumes of the Japanese brands. But the WSJ reports that Bernstein Research analyst Max Warburton has described the future outlook for the Japanese companies in China as "complicated."
"Nationalistic feelings are an impediment. [Japanese] premium brands will struggle," Warburton wrote in the study. According to the study, much of this anti-Japanese antagonism is based in China's rural areas and smaller cities – parts of the country where car companies are looking for unrelenting sales growth.
Warburton predicts that German brands are well placed to benefit from the polarised market.
"The one thing that comes out most clearly is that most Chinese really want a German car," he noted. "While we expect Japanese brands to continue to recover market share this year, ultimately the market will belong to the Germans."
By drilling down through the data, the researchers learned that the Chinese consider Japanese cars are more economical than German or American cars, and they were perceived to be "overwhelmingly superior" to South Korean brands Hyundai and Kia.
But while the respondents placed Japanese brands ahead of cars from other countries based on running cost, for example, only 41 per cent said they would buy a Japanese car costing more than 300,000 yuan (AUD $52,000).
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Written byCarsales Staff
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