Toyota, Honda sales plunge in China as politics clash

Honda and Toyota are reporting today that their sales in China are plunging, another sign of political turmoil and economic worries.

Toyota's sales fell by 48.9% last month in China compared with the same month last year. Honda's sales were down 40.5%, the Associated Press reports. It was the biggest drop in Chinese sales for Toyota since January 2008, Bloomberg News says.

The reason for the fall is almost entirely political. China is feuding with Japan, home to both Toyota and Honda, about some islands surrounded by rich fishing grounds in the East China Sea, making consumers nervous. There have been protests, usually aimed at Japanese interests in China, and Toyota and Honda are the most visible.

"People are afraid of buying Japanese cars," Satoshi Yuzaki, Tokyo-based general manager at Takagi Securities, is quoted by Bloomberg as saying.

But the Chinese economy has been growing weaker for months, and Chinese officials are starting to impose restrictions on cars in some cities where the streets are becoming clogged.