China – Japan tension costs Japanese automakers $250 million in lost production image

Japanese automakers have lost an estimated $250 million in output because of anti-Japan protests in China this week.

Carmakers from Japan now face another risk, that sales will fall in the world’s largest car market. Lost production due to plants suspensions amounted to around 14,000 vehicles as of Thursday, according to an estimate from IHS Automotive. That translates into a lost revenue of about $250 million, based on an average sales price of about $18,000 for the Japanese brands. Losses could rise, as Toyota said some of its China plants are still suspended. Honda also has two factories halted, while Nissan has resumed operations.

Chinese protesters took to the streets this week in response to an escalating dispute with Japan over a group of isles in the East China Sea. The protests determined Japanese automakers, including Toyota, Honda and Nissan, to temporarily halt manufacturing at plants in China.

Nissan is the most exposed of the three automakers, as it is the most successful Japanese automaker in China. Nissan’s sales in the world’s largest car market account for 27 percent of its global volume, compared to 18 percent for Honda and 11 percent for Toyota. According to industry analysts, automakers would be able to recover the lost output by running more overtime.