Honda October Sales Drop 54% in China image

Honda reports China sales last month dropped 54%, the second month of sales slump due to the territorial dispute between Japan and China.

Earlier this week Honda was forced to cut its full-year earning target by a fifth and announced it expects business to get back to normal in China in February. Meanwhile, customers in the automaker’s second-largest market will choose US, Korean and German brands instead.

“People no longer take to the street anymore as they did in mid-September, but they aren’t buying a lot of Japanese cars either,” said Zhang Xin, an industry analyst at Guotai Junan Securities. “There will be some recovery down the road but it will be very slow.”

Honda manufactures cars in China with its partners Dongfeng Motor Group and Guangzhou Automobile Group. Last month the automaker sold 24,115 vehicles in the country, down from 51,826 vehicles in 2011. The decline has increased quickly from 41% in September to 54% last month. From January to October sales increased 2.7% to 494.108 vehicles. Honda announced that its two biggest plants in the country will continue to run on one shift, instead of two, until the end of the year.