Japanese players eye record sales in 2016

 
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Checking out a Mazda at an auto show in Guangzhou this past November.

GUANGZHOU, China -- The top three Japanese automakers and Mazda Motorsee Chinese sales soaring to record highs this year despite the slowing economy, helped by a tax break on compact models.

     New-auto sales increased 7.7% on the year in January, the China Association of Automobile Manufacturers said Friday. The tallies for Toyota Motor, Nissan Motor and Honda Motor rose even more.

     The four automakers announced 2016 sales plans for China by Friday. Nissan, which enjoys the biggest market share among the Japanese players, targets growth of 4% to 1.3 million vehicles. Toyota and Honda each aim to top 1 million. Mazda targets a 2% rise to 240,000.

     Aggregate sales by the quartet plus Suzuki Motor and Mitsubishi Motors may exceed 4 million vehicles for the first time.

     A tax break introduced last October for autos with engines of up to 1.6 liters is creating a significant tailwind.

     Nissan's Chinese sales have regained momentum since the program's rollout. It sold more than 30,000 units of the Sylphy sedan, which qualifies for the break, for four straight months through January -- an unusually strong showing in a market where a model with sales above 10,000 units a month is considered popular. Compacts and sport utility vehicles, gaining traction in China, are expected to enjoy further growth.

     Toyota sees sales climbing 2.4% on the year to 1.15 million units in 2016. Sales jumped 32.1% in January, underpinned by the mainstay Corolla compact, which qualifies for the tax break.

     Honda, which sold 1 million vehicles in China for the first time last year, expects to move 1.07 million this year. The 6.3% rise would exceed those by Nissan, Toyota and Mazda.

     Japanese brands have also regained their lost popularity here. The six automakers' Chinese sales had fallen to a little over 3 million vehicles in 2012, the year Japan nationalized disputed islands in the East China Sea. Now, drivers are looking again to Japanese brands for their consistent quality, among other expectations. Chinese consumers' trust in Japanese cars has steadily grown.

     With the boost from the tax program seen continuing, the industry association expects sales to rise 5.9% to 26.04 million units. But sales may drop off sharply if the effects of the tax break dissipate from a further slowing of the economy. Stellar sales now simply cannibalize future demand, some say.