( Financial Times ) -- Japanese carmakers appear to be suffering significant sales declines in China over a flare-up over disputed islands in the East China Sea , after Mazda reported that sales in the country fell 35 per cent year on year in September . Mazda is the first Japanese automaker to report China sales data since violent anti-Japanese protests erupted in Chinese cities last month over the Senkaku islands -- a small chain of islets controlled by Japan but claimed by China . The September data give shape to reports that Chinese consumers are shunning Japanese cars and other products in response to the territorial conflict , which has aroused nationalist passions on both sides . Thousands of Chinese and Japanese tourists have cancelled trips to each other 's countries . Chinese customs officials are also reported to be holding up imports of Japanese electronics components , chemicals and other goods at Chinese ports . Cars are a particularly visible symbol of Japan 's economic presence in China . In an incident that has come to symbolise the public rage unleashed by the dispute over the Senkaku islands -- which China calls the Diaoyu -- a Chinese man in Xi'an was severely beaten by a mob that discovered him driving a Toyota Corolla . Mazda is Japan 's fifth-largest carmaker and has a relatively small presence in China . But analysts say its problems are shared by other Japanese groups . Toyota was already cutting back production of cars and trucks for the Chinese market in the expectation of lower demand and others may follow suit . Many Japanese manufacturers shut down factories in China for several days during the worst of the protests in mid-September . Goldman Sachs estimates that sales of Japanese-brand cars in China will be 40 per cent lower in the six weeks to the end of October than the same period last year . September and October are the most important months for car sales in China , heightening the impact on production and profits . `` China has become a second source of earnings for the Japan auto industry after the US and anti-Japan sentiment there poses serious near-term damage to sales , '' Kota Yuzawa , a Tokyo-based analyst at Goldman , said in a recent report that looked at the impact on Toyota , Nissan and Honda -- Japan 's biggest carmakers . Of the three , Nissan is the most exposed to the Chinese market and will suffer the biggest financial setback , Mr Yuzawa said . He cut his estimate for earnings per share at the company in the fiscal year to March by 9.5 per cent , to Y97.3 , compared with reductions of 6.2 per cent for Honda and 2.4 per cent for Toyota . Mazda said it sold 13,258 vehicles in the country during the month . Nissan , Honda and Toyota are expected to report September China sales figures next week . Japanese carmakers were already on the defensive in China , a market whose blistering growth in recent years has made it a strategic priority for rival European , US and Korean brands . Supply disruptions caused by the 2011 earthquake compounded already existing issues of declining competitiveness , say auto analysts in China . LMC Automotive , a market research firm in Shanghai , estimates the collective share held by Japanese carmakers has shrunk almost four percentage points since 2009 to 22.8 per cent . European , American and even Korean carmakers have introduced new models that have captured the imagination of Chinese car buyers , while Japanese auto companies have stuck to models that are viewed as tired and even boring by mainland consumers . Lack of innovative new models has become an increasingly serious problem as the Chinese market has slowed from growth rates as high as 45 per cent per year , down to single-digits . This has led to cut-throat competition in China 's crowded car market , which boasts as many as 100 carmakers . Additional reporting by Patti Waldmeir in Shanghai . © The Financial Times Limited 2012 .
anti-Japanese carmakers appear to be suffering significant sales declines in Senkaku . Mazda reported that sales in the country fell 35 % year on year in year . First automaker to report China sales data since violent Japanese protests .