Honda along with other Japanese car makers face big losses in the Chinese market
|   Monday, October 22, 2012
Takanobu Ito, President, Honda Moto Corp recently said that the company's investment plans for China were not going to change even though Honda faced a 41 percent loss of estimated sales in the previous month due to a series of problems regarding a group of islands. China has the potential to develop a host of hybrid vehicles and the current political scenario is scheduled to last for a maximum of six months. Therefore, the investment plans are solid and well placed at the moment.


The China sales of Honda were hit the maximum since May 2011, however the company seems to take it lightly. Honda expects the sales figures to double over the next few years and this is the third example of Japan's fifth largest auto maker expanding globally. The market is looking forward to hybrid vehicles and the Chinese market will be the hot property. Honda plans to be a pioneer and develop vehicles on Chinese soil so that the ultimate products are homemade and cheap.

This is a major marketing strategy and Honda is willing to invest in its Chinese plants to increase the arrangements of production within the next few years. Considering the price in the global oil prices, the world will look forward to small vehicles in the future and this is the perfect time to cash in on the occasion. Honda is expecting sales of 4.2 million worldwide this fiscal year and fit vehicles are the hot pick this season.

The Honda Jazz has been doing quite well around the world and especially in the Chinese market and this recent decline in sales will surely hit the company. Apart from Honda the three other car makers who have suffered huge losses are Nissan and Toyota. All the three big Japanese players have close to 10 percent of their vehicle sales accounted for by China and this blow has exposed Nissan the most.

All the firms have recorded close to 45 percent sales drop from the same quarter in 2011. There has been an ongoing tension with the Chinese government officials and if this continues, the Japanese firms could face losses up to 340 Million Dollars each.

This is a tight situation and is being handled diplomatically. As a corrective immediate measure all the big players have decided to cut their productions by half and by doing this they will try and minimize losses from the future.
This will surely have an impact on the company sales as all the companies had planned to sell close to a million vehicles this fiscal year. These plans are currently up on hold. Honda however has decided not to withdraw plans for future funding as the future seems to be bright. According to survey by the Nikkei, Honda is set to cut down production by 30,000 – 40,000 units for the moment.

These are the current work plans and the Japanese car makers will have to hope for the best in future. However repetition of such an incident is possible and the companies will have to safe guard themselves from such a blow in the future.
PHOTO GALLERY
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