How the Big Automakers Are Faring in China: General Motors Company (GM), Honda Motor Co Ltd (ADR) (HMC), Toyota Motor Corporation (ADR) (TM)

Recently released China auto sales numbers spell out very different scenarios for some of the top automakers. General Motors Company (NYSE:GM), on one hand, continues to do well in the country. Sales for China’s best-selling automaker rose 7.9% in the first two months of the year.

That wasn’t the case for all automakers, though. Three of the big Japanese automakers — Toyota Motor Corporation (ADR) (NYSE:TM), Honda Motor Co Ltd (ADR) (NYSE:HMC), and Nissan (OTCBB:NSANY) — all experienced market share decreases for the first two months of the year in China. A main reason for this is the continuing territorial dispute between Japan and China which has led to increasing anti-Japanese sentiment in China.

In the video below, analyst Brendan Byrnes explains why the China auto market is unique for these automakers, and which are on track to continue to do well in the country.

Andrew: Hey Fools, Andrew Tonner here. I’m joined today by Brendan Byrnes, our industrials analyst for Fool.com.

Brendan, let’s take a look at one of the biggest drivers of the auto market, China. Specifically, the recent developments of GM in China. When you look at this story line, what’s going on?

Brendan: General Motors Company (NYSE:GM) continues to do very well in China. Over the first two months, January and February, increased sales by 7.9% versus last year.

What’s interesting to see is the big Japanese auto makers — Toyota Motor Corporation (ADR) (NYSE:TM), Honda Motor Co Ltd (ADR) (NYSE:HMC), Nissan — all had market share decreases. The reason for that is the continued fallout over this territorial dispute that they’re having with China right now.

Investors of those companies, and of General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F), need to keep an eye on that and how that’s going to affect them down the road, because right now there’s some anti-Japanese sentiment in China, which is not a good thing for those companies when you’re talking about the biggest auto market in the world now.

We don’t know Ford’s February numbers yet, but we know they’re coming off a great January in which they doubled their sales from the year before. They sold about 60,000 cars in January. General Motors Company (NYSE:GM) sold about 310,000 cars in January in China, so clearly about one-fifth as many cars for Ford, but that also creates opportunity.

They’re pumping $5 billion into Asia, building all sorts of factories. They want to become a big player here, and I really like their plan.