Are Toyota’s China Sales on the Road to Recovery?

For the first time since January, Toyota Motor Corp. (NYSE:TM) reported sales growth in China, marking a welcomed change after the world’s biggest automaker posted sales falling 6.5 percent in April, the ninth drop in 10 months.

According to a report from Bloombergfollowing Toyota’s increase in production in China a month earlier, deliveries rose 0.4 percent to 79,000 units in May. Japanese automakers are still coping with the fallout of a territorial dispute that flared in September, but the rise in sales is an encouraging sign that consumer resistance is fading.

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Despite May’s optimistic sales increase, sales for the January-to-May period were still short 8.6 percent of last year’s level, when Toyota initially had to report its first sales decline since 2002. It increased its output in China 8.7 percent in April, while Nissan Motor Co. and Honda Motor Co. (NYSE:HMC) posted similar gains of 7.1 percent and 5.9 percent, respectively.

Toyota once had plans to make China its third million-unit market, but it has since pushed back these arrangements. Its sales in the country aren’t expected to recover before autumn, but the company remains cautiously optimistic about its future as the backlash against the territorial dispute continues to dwindle.

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