A TERRITORIAL row between Asian super-economies Japan and China has seen car maker Nissan dramatically cut its full year profit forecast by 20 per cent.

The Japanese manufacturer, which employs almost 6,000 North-East workers, now expects to make £2.5bn (320bn yen) in profit for the year to March 2013, down from an earlier estimate of £3.1bn (400bn yen).

The firm reported September car sales in China had nosedived by 35 per cent, after consumers in China have boycotted Japanese products following a dispute between the two countries over islands in the East China Sea.

The Northern Echo understands the news will not affect operations at Nissan’s Sunderland plant, which also supports thousands more supply chain jobs. Earlier this year, Nissan announced plans to make ten new vehicles in 2013, including the electric Leaf, which will be made at Sunderland.

The firm, which relies on China for almost 30 per cent of its global sales compared to Toyota’s ten per cent, has been hardest hit amongst Japanese carmakers by the anti-Japan sentiment.

Nissan trimmed its 2012 China sales forecast to 1.175 million vehicles from a previous 1.35 million.

But chief operating officer Toshiyuki Shiga said the company remains committed to China with no major changes in its long-term growth plans.

He said visitors to the company's China dealerships were back to around 80 per cent of pre-dispute levels, and orders were running at about 70 per cent.

"We are gradually seeing signs of recovery [in China]. Customers are gradually coming back to dealerships," Mr Shiga said.

However, he added Nissan would assess future investments cautiously.

The Japanese car maker’s profits warning contrasted sharply with the fortunes of BMW, with the German automobile manufacturer announcing a record pre-tax profit of £1.6bn (2bn euros) in the third quarter, thanks chiefly to strong sales in Asia.

The world's largest luxury carmaker saw sales in China rise 33 per cent while Japanese sales grew by 21.5 per cent in the nine months to the end of September.

Nissan said its setback in China was somewhat countered by growth in sales elsewhere, however, including in the US, Indonesia and India in the July-to-September quarter. The company posted a net profit of £0.8bn (106bn yen), an almost eight per cent rise compared with the same period last year. Koji Endo, automotive analyst with Advanced Research Japan, said he remained optimistic about Nissan's overall growth, which he said could make up the shortfall in China.

He said: "Asia is another very strong market especially in Thailand and Indonesia, Nissan seems to be aggressively investing in Thailand, so hopefully in the future, any weakness in the Chinese market can be offset by Thailand, Indonesia as well as in the US.”