Monday, November 12, 2012

Feud-weary Japanese auto part firms fleeing China


THE STAR reports:

After anti-Japan protesters in China smashed cars and torched dealerships, Koito Manufacturing Co. suspended a plan to triple output in the country.

With a new factory half-built, Koito — a Toyota Motor Corp. supplier — reasoned that it may no longer need it.

“Demand from automakers is unclear, so we don’t know how long we will have to freeze the project,” said Shinji Karasawa, spokesman for the Tokyo-based headlight maker.

Along with Koito, Japanese parts-makers including Sumitomo Electric Industries Ltd. and Toyo Tire & Rubber Co. are rethinking plans to expand in China, where Toyota’s sales plunged 41 per cent in September as demonstrations over disputed East China Sea islands flared. The manufacturers are focusing expansion plans on Thailand, Vietnam, Myanmar, Indonesia and Cambodia, a sign that this year’s drop in Japanese investment in China may deepen next year, crimping bilateral trade that has tripled to $340 billion in the last decade.

“Our board members had been vaguely wondering if we should move future production out of China; then the protests prodded us to decide to accelerate planning toward moving out,” said Masayoshi Matsumoto, president of Sumitomo Electric, the world’s second-biggest maker of wiring harnesses.

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