War memories may limit Japan car makers in China

Olive Zhan loves her jet-black Nissan Bluebird, a car she says has never let her down.
But ask the 30-year-old businesswoman about Japan's brutal occupation of China which ended nearly 60 years ago, and her expression blackens.
"I must admit, I do feel guilty driving a Japanese car after what they did to us in the war," she said at a carpark in Shanghai. "I'll probably get a QQ next time," she added, referring to home-grown SAIC Chery's mini-car.
It's attitudes like this that some analysts say may scupper bold plans by Japanese car makers to conquer the Chinese market, where sales almost doubled to around two million cars in 2003 and look set to grow 40-50 percent this year.
Analysts say the anti-Japanese feeling, plus persistent bad publicity in Chinese press, could be their undoing in battling for market share with Volkswagen and General Motors.
The car makers themselves hope the high quality of their vehicles will win over customers, as they have in the United States. But doubts persist.
"It seems impossible that the Japanese will dominate this crucial market, and far more likely that they will be marginalised, partly because of this resentment," said Graeme Maxton, managing director of consultancy Autopolis.
Last year brought bad publicity for some Japanese car makers in China, especially Toyota Motor.
In December, Japan's top auto maker withdrew two magazine advertisements and apologised after Chinese readers complained they had insulted the country.
Globally Toyota outsells Ford, and has some 11 percent of the US market, the world's largest. But it has just under five percent of the Chinese market, though sales grew 95 percent in 2003 from a low base.
Toyota last year also lost a lawsuit against Geely Group in which it accused China's sole private car maker of placing a logo similar to its well-know stylised "T" on one of Geely's sedans.
"This is going to be a recurring issue for the Japanese auto makers. They're just an easy target," said one Shanghai-based analyst at a foreign consultancy, who declined to be named.
Anti-Japanese sentiment erupts easily in China, which believes Tokyo has whitewashed its war-time history and isn't doing enough to atone for the past.
But Toyota's two ads slipped under censors' noses easily.
One featured a Land Cruiser towing a truck that resembled a Chinese military vehicle. A second showed a stone lion - a traditional Chinese symbol of authority - saluting a Prado sport utility vehicle (SUV).
The backlash surprised the company. Readers protested the pictures implied Japanese vehicles were more hardy than Chinese military equipment, or that Japanese products were superior to Chinese.
"When it comes to the Japanese, ad agencies need to be very cautious," said Josh Li, managing director of advertising firm Grey World-wide in Beijing.
But caution alone may not win the battle, analysts say.
State media scrutinise problems with Japanese cars far more than other brands, and Japanese brands have accounted for most of the recalls in China so far, they say.
Mitsubishi Motors Corp hit the news in 2001 when a couple of drivers sued it after an accident in a Pajero SUV, which led to a brief nation-wide ban on the vehicle.
The Japanese auto maker won the case in December 2003, but only after a prolonged bashing in the local media.
There are exceptions, as the six-month waiting list for Honda Motor's Accord model shows.
"Based on our surveys, Chinese customers tend to compartmentalise. I don't see any anti-Japanese sentiment carrying over to decisions for purchasing cars," said Michael Dunne, head of Automotive Resources Asia.
Having entered China over a decade behind Volkswagen, the Japanese already control a quarter of the market, slightly less than their share of the US market, and say the future looks bright.
"It's a fact that many Chinese people like our cars," a senior spokesman at Toyota said.
But some analysts say this attitude is part of the issue.
"The irony of it all is that Japanese auto makers are oblivious to this problem," said Autopolis' Maxton.
He pointed to the South Korean market, where a similar attitude has kept Japanese cars at the fringe.
After the government opened up its car market to Japanese makers in 1999 - more than a decade after it allowed Western brands in - Toyota entered with only the high-end Lexus marque, which competes with European brands rather than domestic models.
In its fourth year, Toyota expects to sell just 4,500 cars in South Korea and has no immediate plans to launch its core brand.
"It may not be as extreme as that, but...it would be terribly easy for the government to drum up nationalism to spur the local car industry, and the brand-building efforts by the Japanese may come to nothing," Maxton said.