China-Japan Dispute Hurts Dongfeng Earnings

The Chinese swell of anti-Japan sentiment that has battered the sales of Japanese carmakers also is taking a steep toll on their Chinese joint venture partners.

Dongfeng Motor Group Co. reports that its net income tumbled 30% year over year to 1.7 billion yuan ($278 million) in the July-September period of 2012. The company relies heavily on vehicles produced by its ventures with Honda and Nissan.

A dispute between China and Japan over control of a small island chain in the East China Sea began in August. Sales of Japanese vehicles weren't hit hard until the mid-September when the largest and most violent protests occurred.

Dongfeng sales fell 22% in September. Japanese automakers have said they do not expect Chinese demand for their vehicles to rebound soon.