LITTLE ROCK — Nissan Motor Co., the top Japanese seller of vehicles in China, cut its full-year net-income forecast 20 percent after consumer backlash stemming from an international territorial dispute sent sales lower in its largest market.

Net income may total $4 billion for the year ending March 31, compared with its earlier estimate of $5 billion, the Yokohama, Japan-based company said in a statement Tuesday. The carmaker cut its operating income forecast to $7 billion from $8.7 billion, and lowered its global vehicle sales target by 5 percent to 5.08 million units.

The cutbacks at Nissan, which follows Honda Motor Co. in lowering its profit forecast, illustrates how leadership in the world’s biggest auto market has become a handicap amid the row over uninhabited islands claimed by China and Japan. Toyota Motor Corp., which has the smallest share among the three largest Japanese carmakers, raised its income forecast on demand in the U.S. and at home.

Nissan’s “strong presence in China is backfiring on them,” said Yuki Sakurai, president of Fukoku Capital Management Inc. in Tokyo. “I’d pay attention to what decision [Chief Executive Officer Carlos] Ghosn will make to turn around the situation. He has been a strong leader, and if the China-Japan dispute continues too long, I think he may change the direction of Nissan’s China business strategy.”

Nissan also cited the strength of the yen and deteriorating market conditions in Europe as reasons behind the forecast cut, according to the statement Tuesday.

Nissan shares fell 2 percent to close at $8.42 in Tokyo before the earnings an- nouncement. The stock has declined 2.2 percent this year, compared with the 6.2 percent gain in the Nikkei 225 Stock Average.

Net income was $1.3 billion in the July-to-September quarter, beating the $1.1 billion average of seven analysts’ estimates compiled by Bloomberg. Operating income was $2 billion.

Nissan’s Chinese deliveries fell 41 percent last month after reporting a 35 percent decline for September. The automaker reduced its sales target for the market to 1.175 million units. The impact of the sales decline will be reflected in the second half, said Chief Operating Officer Toshiyuki Shiga.

The slump in China is the third crisis for the automakers in less than two years, after the Japanese tsunami and Thai floods destroyed factories and disrupted supply chains.

Rioters in anti-Japan demonstrations smashed cars and torched dealerships in China in September amid escalating tensions over a group of uninhabited islands claimed by both countries.

Nissan has vowed to reimburse owners for damage to vehicles during protests, including future demonstrations, as the company works to lure customers back.

Orders in China recovered to 70 percent of pre-protest levels by mid-October, while showroom traffic is at about 80 percent of the norm, Shiga said.

For Nissan, the North America operations contributed $740 million in profit in the second quarter, lower than the average $808 billion analyst estimate.

Nissan is ramping up production of the new look Altima sedan, its best-selling car in the U.S., after an initial supply bottleneck, according to Kota Yuzawa, a Tokyo-based analyst at Goldman Sachs Group Inc.

The automaker fell behind its target to produce 30,000 units of the model a month because of problems including the sourcing of parts, Yuzawa said.

The Altima last year overtook Honda’s Accord as the best-selling car in the U.S. behind only Toyota’s Camry. This year, Nissan delivered 76,939 units of Altima in the July-to-September quarter, fewer than the 92,669 of Accord and 100,885 of Camry, according to researcher Autodata Corp.

Ghosn said in September that in Europe the automaker is “preparing for many mediocre years” as the region grapples with shrinking demand and excess capacity.

Nissan in the region delivered 328,287 vehicles in the first half of the financial year that ended in March, 3.2 percent fewer than a year earlier.

Business, Pages 33 on 11/07/2012