China and Japan are in a dispute over islands and that's bad news for Japanese auto ambitions in China. Thousands protested in Chinese cities and Toyota Motor Corp. and Panasonic Corp. reported damage to their operations. Demonstrators in Beijing, Shanghai and Guangzhou called for Chinese sovereignty over disputed islands and the boycott of Japanese goods. Sales of Japanese-branded passenger cars fell last month in China, the world's largest car market, compared with gains of more than 10% for German, American and South Korean vehicles. Nissan said, in an industry forum, that the company had to cut back on marketing events after anti-Japan demonstrations started last month.