3 Auto Stocks To Buy, 3 To Avoid On Anti-Japan Protests In China

Online, October 2, 2012 (Newswire.com) - The recent surge in anti-Japan protests in China means that American and European car manufacturers hold a genuine chance to witness an increase in their Chinese sales, in what will be a zero sum game given that Japanese manufacturers are expected to see deep cuts in their sales figures.

Nissan is on the top of the list of affected Japanese brands due to its strategy of significantly expanding production in China.

Toyota, Nissan and Honda accounted for four of the 10 best selling SUV models in the first eight months of this year.

Honda gets 15% of its revenues from its Chinese operations.

GM gets 10% of its sales from China. Despite a weak Chinese economy, a YoY rise of 7.3% in GM sales (Chinese) in August shows that the company is benefiting from the anti-Japan protests.

Ford, through its Focus, Mondeo and Egde models, is also benefiting from the situation.

The company has sold 1.49 million cars in China YTD.

Conclusion:
Collectively, Japanese cars have dominated the Chinese market since 2005. However, this year, the market share of German models is expected to be 22.5%, which is more than the collective 22% market share of Japanese cars, according to the projections of China's Passenger Car Association. China is the world's largest auto market with 18.5 million sales last year and expected sales of 20 million by this year's end. According to Cui Dongshu, the deputy secretary general of the Passenger Car Association, the repercussions for Japanese car manufacturers are very serious and will last longer compared to 2010.\

Source URL: http://seekingalpha.com/article/897561-3-auto-stocks-to-buy-3-to-avoid-on-anti-japan-protests-in-china