Japanese automakers, whose sales in China had been hit hard by the political tension between China and Japan in the past few years, are again gaining ground and analysts said that the recovering trend is expected to continue.
In July, Japanese automakers sold a total of 256,600 passenger cars in China and claimed 20.23 percent of the segment, up 4.52 percentage points compared with the end of 2014, data from the China Association of Automobile Manufacturers (CAAM) showed.
Japanese automakers sold the most passenger cars among all foreign auto brands in China in July, followed by German automakers, accounting for a 19.37 percent share in the market.
July also marks the second consecutive month that Japanese automakers have outperformed German companies, according to CAAM.
Sales of Japanese cars in China have been in a slump since a diplomatic spat in September 2012, when the Japanese government announced the "nationalization" of the Diaoyu Islands in the East China Sea. The incident led to strong anti-Japan sentiment among Chinese consumers, prompting some to take to the streets and destroy several Japanese cars.
The political spat dealt a major blow to Japanese firms in China. In 2012, Japanese automakers lost their top position to German companies and ranked second among foreign auto brands in the passenger car market segment.
But now, Japanese automakers are recovering while their major German rivals are having trouble maintaining growth.
In the first seven months, Toyota sold a total of 605,300 cars in China, up 11.9 percent year-on-year. The company's Corolla has topped the sedan sales list for two consecutive months as of July, according to CAAM.
Another major Japanese automaker Honda sold 533,998 units of cars in China from January to July, surging 32.8 percent on a yearly basis. In July alone, Honda's sales soared 50.4 percent year-on-year.
The strong performance was mainly boosted by the company's compact SUVs, such as Vezel and XR-V, Zhang Yu, managing director at consultancy Automotive Foresight (Shanghai) Co, told the Global Times on Tuesday.
The SUV sector is still growing at around 40 percent even though growth in the overall passenger car segment had slowed to 3.39 percent year-on-year in the first seven months.
Major Japanese automakers have increased investment in research and development in China in the past few years to produce cars appealing to Chinese consumers and to make quick product updates.
Also, some of them are using more locally produced auto parts in a bid to cut costs, according to media reports.
"These efforts are starting to pay off," Wu Shuocheng, a Shanghai-based independent industry analyst, told the Global Times on Tuesday, adding that the recovery trend in the sales of Japanese cars is expected to continue unless another political spat breaks out.
In contrast, sales of German carmaker Volkswagen in China dropped 3.9 percent year-on-year to 1.74 million units in the first half of this year, though the company sold the most cars during the period.
Analysts said that a major reason behind the sales drop of Volkswagen is weak SUV products.
China's homegrown auto brands also gained a bigger share in the first seven months, thanks to their rich collection of compact SUV models.
Sales of Chinese auto brands increased 13.58 percent year-on-year to 4.68 million cars in the first seven months, accounting for a 41.17 percent share of the overall passenger car segment, up 3.69 percentage points over the same period in 2014, CAAM data showed.
