BEIJING (Reuters) -- Japan's Honda Motor Co. and Mazda Motor Corp. are suspending production in China in the wake of anti-Japan protests over the weekend in response to a territorial dispute between Tokyo and Beijing.
Nissan Motor Co. also suspended production in China on Monday for two days in the wake of the anti-Japan demonstrations.
Nissan suspended production on Monday and Tuesday at two factories each in the southern China city of Guangzhou and the central city of Zhengzhou, two people familiar with the matter told Reuters.
"Nissan suspended production in cities where the protests were severe," said one of the sources with direct knowledge of the matter.
Toyota Motor Corp. said its offices and factories were operating as usual on Monday in China, where demonstrators have attacked Japanese businesses.
Toyota was still checking which dealership stores were affected, spokesman Joichi Tachikawa said, adding the company has not ordered home its Japanese employees in China.
Honda spokeswoman Natsuno Asanuma said the Japanese company is suspending output on Tuesday and Wednesday at two factories each in the southern China city of Guangzhou and the central city of Wuhan.
The four plants, run jointly with Chinese partners, have production capacity totaling 820,000 cars a year, she said. "We have decided to suspend production for two days" in the wake of the heightened tensions between China and Japan, Asanuma said.
"Our dealers are not in a position to receive car allocations currently," she said, referring to attacks on some of those stores by protesters over the weekend.
Mazda will temporarily halt production at its Nanjing assembly plant, which it jointly operates with Chongqing Changan Automobile Co. and Ford Motor Co., a company spokesman said on Monday, following the anti-Japanese protests in the country.
The factory will be closed for four days starting Tuesday, company spokesman Naoto Oikawa said.
Violent anti-Japan protests that erupted in China over the weekend may cause more damage to Japanese automakers in the world's largest vehicle market than natural disasters last year, according to the state-backed dealership group.
Many dealerships in China that sell Japanese cars have shut for now after some outlets were attacked and vandalized, according to Luo Lei, deputy secretary general of the China Automobile Dealers Association.
Besides those boycotting Japanese goods, most Chinese citizens won't dare to buy Japanese-brand cars because of safety concerns, Luo said.
"The impact caused by natural disasters can be fixed quickly, while it takes a longer time and efforts to make hostile sentiment against Japanese cars go away," Luo said, declining to quantify the damage because losses are still being tallied.
"I have worked at the association for ten years and this round of losses suffered by Japanese car dealers is the worst I've seen."
Bilateral tensions
A territorial dispute between China and Japan worsened as thousands protested in Chinese cities over the weekend in the worst flare-up of tensions between Asia's two largest economies since 2005.
Toyota and Panasonic Corp. reported damage to their operations from fire, a Honda Civic was set ablaze in front of a dealership in Shanghai, while demonstrators handed out fliers listing names of Japanese brands to boycott.
"The longer the conflict between China and Japan lasts, the more this anti-Japanese sentiment will spread among ordinary consumers," said Klaus Paur, Shanghai-based global head of automotive at researcher Ipsos. "In this politically sensitive situation, Japanese manufacturers have to reduce marketing as well as communication activities, which in turn, significantly weakens their brands and leaves the field for competitors."
Still, neither Japan nor China is interested in a serious conflict, which means Japanese brands in China can avoid long-term damage, he said.
A Nissan spokesperson in Beijing said the company is discussing whether to give employees in the capital a day off Tuesday or allow them to work from home.
Overturned cars
Tuesday is the anniversary of the Mukden Incident, also known as the Manchurian Incident, which took place in 1931 near what is now the Chinese city of Shenyang and led to the Japanese invasion of the northeastern portions of China.
Over the weekend, TV news showed Japanese cars being overturned and windshields smashed by demonstrators in some cities.
Photos posted on online forums showed Toyota cars with the brand badges covered with logos of Chinese carmakers such as BYD Co., while some Japanese car dealerships hung Chinese flags and banners proclaiming patriotism for China.
A Toyota dealership was set on fire in the eastern city of Qingdao, the company said.
Sales of Japanese-branded passenger cars fell last month in China, compared with gains of more than 10 percent for German, American and South Korean vehicles, according to China Association of Automobile Manufacturers.
Nissan, the biggest Japanese automaker by sales in China, said on Sept. 6 that deliveries in the country have been affected as it cut back on marketing events in the wake of anti-Japan demonstrations that started last month.
Last May, Honda's sales in China fell 32 percent in the aftermath of the earthquake and tsunami that struck northeastern Japan two months earlier.
Toyota's deliveries in China plunged 35 percent in May 2011 as a shortage of parts caused by the record earthquake halted production in the country.
Bloomberg contributed to this report
