Honda Motor Co., the third biggest automaker in Japan, is the latest carmaker to miss its Chinese sales target last year, amid an economic slowdown in the world’s largest auto market.
Besides the economy cooldown, Honda is the latest among Japan’s three largest auto companies to report lower than forecasted new car sales in the country – the auto industry in China sees intensifying competition and, additionally, the Japanese companies seem to suffer ripple effects from the political tensions between the two nations. The Tokyo-based company said it delivered a total of 788,276 autos in China, even lower than an already revised threshold of 800,000 units. On the other hand, the tally for 2014 was actually positive, with sales growing 4.1 percent last year, buoyed by an outstanding delivery jump of 40% in December. Honda, together with larger Japanese rivals Toyota and Nissan, is still on the recovery path from the 2012 Chinese consumer backlash prompted by the decision of Japan to nationalize a group of disputed islands in East China Sea.
According to Zhu Bin, an analyst at LMC Automotive in Shanghai, the Japanese automakers “haven’t reacted fast enough to the changes in the market,” as German brands are squeezing them out in the higher-end segments – affordable entry-level models have eroded the market of the Japanese brands, which typically sell for higher prices than other mass-market peers. Additionally, all the carmakers active in China had to deal with the lowest Chinese economic growth since 1990. Honda has now dropped 100,000 units off its annual sales target for 2015.