Honda Emblem

Automotive News reports Honda has slashed its net profit forecast by 20 percent following poor sales in China. Like other Japanese manufacturers, Honda sales suffered at the hands of anti-Japanese sentiment in China following a territorial dispute between the two nations. All told, Honda sales fell off by 40.5 percent last month alone in the People's Republic. As a result, the company has cut production at its two largest Chinese manufacturing facilities to just one shift. Even so, the automaker says it still plans to move forward with an $880 million investment to expand manufacturing at its Guangzhou and Wuhan plants over the next few years.

Meanwhile, Toyota and Nissan are expected to adjust their profit forecasts shortly. Other automakers have been quick to take up the slack left by their Japanese rivals, with Hyundai, BMW and Volkswagen claiming more market share. Automotive News reports the turbulence between China and Japan could extend into the fourth quarter.