People pass by overturned Japanese cars in Shenzhen on August 17 following a mass protest against Japan over the Diaoyu Islands dispute. Photo: northnews.cn

Japanese cars have become the victims of nationalistic Chinese protestors during the widespread anti-Japanese demonstrations that recently broke out in Beijing, Shanghai, Shenzhen and many other cities in China.

At around 4 pm on Monday, two German cars - a white BMW and a black Audi - blocked the road in front of the diplomatic sedan of Japanese Ambassador to China Uichiro Niwa and forced it to stop on the Fourth Ring Road in Beijing, Japan-focused Chinese news website ribenxinwen.com reported on Wednesday, citing Niwa.

A man came out of one of the offending vehicles, strode over, and removed the Japanese flag mounted on the ambassador's sedan, the report said.

The symbolic act was a highlight of a new wave of the ongoing anti-Japanese movements across China, starting from August 17.

Coincidentally, it also resembles the situation the Japanese automakers are facing in the Chinese market, as they are being squeezed by their major German competitors.

Cars as symbols

The massive nationalistic protests bode ill for Japanese automakers in China, where they are struggling with declining market shares and an increasing number of quality problems.

In Shenzhen, several Toyota and Honda sedans and SUVs were overturned during a violent march that comprised thousands of people, in which one man climbed onto a flipped Honda Crossover police vehicle and gave an anti-Japanese tirade through a bullhorn, Chinese media reported.

"This is a problem for companies like Toyota, Honda and Nissan, because in China, Japan's auto industry is a proxy for all of Japan. Hate Japan, and you hate its cars," Hans Greimel, Asia editor of Automotive News, wrote on his blog on August 24.

For the owners and potential buyers of Japanese cars, the psychological trauma may prove to be stronger than the physical damages because the attacks were aimed to serve more as a deterrent than a punishment.

A Sinopec gas station in Chongqing has erected a white board, stating in red characters, "This station does not serve Japanese cars," wugang5.com reported on August 17.

Liu Dengyun, the owner of the gas station, told the reporter, "Although our economy is developing, we shouldn't forget history. My action aims to awaken the numb," alluding to the death of 20 million Chinese people in the Sino-Japanese war during World War II.

On Monday, a netizen posted on autohome.com.cn, a popular online auto forum, saying that he had been considering buying a two-liter engine Toyota Camry or a Nissan Teana, but hesitated after hearing the news of the public backlash.

He said he was worried that his new car would become the target of more attacks, considering that September 18, the anniversary of the Japanese invasion of China during World War II, is drawing near.

Meanwhile, to avoid a fatal impact on his mechanical pet, a Nissan Teana owner in Sichuan Province put up a sign in the rear window of his car, saying, "The car is Japanese, but my heart is Chinese," according to a picture posted on tiexue.net, a popular nationalistic Internet forum.

Shrinking market share

The calls for a boycott on the streets and online have dealt another blow to Japanese car companies in China, which have already witnessed ever fiercer market-grab assaults from their archrivals the Germans in the world's largest auto market.

German luxury carmakers Audi, BMW and Mercedes-Benz ignited a price war in China in June, slashing the prices of the Audi A4L, BMW 5 Series and Mercedes C-Class to 250,000 yuan ($39,323) a unit.

This has put pressure on mid-sized, mass-market Japanese vehicles, which sell for between 180,000 and 370,000 yuan, Yang Jian, managing editor of Automotive News China, wrote in a commentary in June.

"The Toyota Camry, Honda Accord and Nissan Teana have been hit hardest," Yang wrote. These three models have been perennial top sellers in China, accounting for roughly 30 percent of China's mid-sized car sales in 2011, according to LMC Automotive, Yang pointed out.

The collective market share of Japanese-Chinese joint venture-made cars declined in the first six months of 2012 to 22.3 percent, the third consecutive slide since 2010, according to a report by industry information website gasgoo.com on August 8.

In an e-mail response to the Global Times on Tuesday, Honda China's PR department said, "[The protests] have had no impact on Honda's sales [in China]. As an enterprise, Honda does not comment on territorial disputes."

"This is a political issue and has nothing to do with companies. We as a company can do nothing about it," Ma Chunping, public relations director at FAW Toyota Motor Sales Co, told the Global Times by phone on Tuesday.

"We're keeping an eye on the development of the event, and cannot predict its impact on sales," Ma noted.

Quality issues

Nationalism's impact aside, the Japanese auto companies have been losing ground to their competitors in China due to increasing quality problems.

In the first eight months of 2012, Japanese automakers issued the most recalls in China, damaging their reputations, according to figures from the General Administration of Quality Supervision, Inspection and Quarantine.

Japanese automakers, including their Chinese joint ventures, recalled a total of 811,147 units of passenger vehicles in the first eight months of the year in China, according to the Global Times' calculation of the figures.

Honda alone recalled 613,923 units of domestically produced and imported passenger cars from January to August.

In comparison, German brands collectively recalled 149,651 units and US brands recalled 134,975 units of passenger vehicles in the same period.

A JD Power study in July found that the percentage of Chinese consumers who were considering buying a European car went up to 32 percent in 2011, while the percentage of those mulling a Japanese car purchase dropped to 27 percent.

"An increasing number of new-vehicle intenders indicate having positive perceptions of vehicle safety and improvements in engine and transmission technology for European models," JD Power said in a press release.