Toyoto Motor said it would cut back production of vehicles for China, a market dented by anti-Japanese sentiment that is already being taken over by German carmakers.

Japanese companies, including Toyota, fell prey to outraged Chinese protesters at the height of tensions and were forced to close up shop. Though operations have resumed, the economic impact of the dispute is still thick in the air. According to the Financial Times, Japanese carmakers were already struggling against US and European rivals for market share, which fell from 26.6% in 2009 to 22.8%, John Zeng of LMC Automotive in Shanghai said. German carmakers outsold Japanese manufacturers just as the Senkaku dispute was gaining momentum. The images of upturned and smashed Japanese-made cars only confirmed the deepening economic fallout from the dispute in the East China Sea.

Toyota said it would cut production to 1 million vehicles in China this year – just over a tenth of its sales worldwide –  while expecting demand to decline further. “We are adjusting production on a business-by-business basis, taking into account the present situation with orders and sales,” Toyota said. Japanese shipping companies told the FT they were “unusually” delayed in Chinese ports while Japan Airlines said it would cut flights to Beijing and Shanghai.