Tokyo/Paris - Honda joined fellow Japanese carmaker Toyota in cutting output further on Friday, as a top European official warned some of the region's manufacturers might not survive a "brutal" 2009 for the industry.
Honda said it will scale back domestic output hours after Toyota announced new production cuts of its own at its North American plants, while Nissan was seen shifting some Japanese assembly lines abroad to cut costs.
As EU business ministers gathered in Brussels to discuss support for the flagging industry and French manufacturers prepared to lobby their government for aid, European Union industry commissioner Guenter Verheugen said some carmakers faced an uncertain future.
"There is no guarantee that all the main European manufacturers can survive the crisis," he told BBC radio.
Verheugen forecast a further 20% drop in sales in 2009 and said the industry's outlook was "to say the least, brutal" as cash-strapped consumers hit by the credit crunch and a deteriorating economic climate continue to defer big-ticket purchases...
More losses forecast
In Asia, Subaru maker Fuji Heavy became the latest auto firm to forecast losses this fiscal year as the spreading global recession dampens demand in mature markets and puts the brakes on sales in emerging ones.
News of Toyota's cuts in North America followed General Motors' warning that its US auto sales would this year sink to a 27-year low.
Toyota, which expects to post its first ever annual operating loss, said its inventory of North American-built vehicles was 80-90 days, having doubled in the past year. It hopes to cut that by half in the second quarter.
The world's biggest automaker had already cut North American production and suspended work on a new plant in Mississippi that was due to produce the Prius hybrid from 2010.
"The current inventory level is a record high for Toyota," said Okasan Securities analyst Yasuaki Iwamoto.
"Sales are falling 30-40% every month, and this pace of fall is unheard of ... Automakers have to cope with it through production cuts as quickly as possible."
Honda, Nissan scale back
Honda said it would reduce domestic output by an additional 56 000 units.
Nissan announced further cuts in Japan on Thursday and a source said it would book an annual operating loss.
The Nikkei newspaper reported on Friday that Nissan was aiming to cut production costs by 30% by making its March subcompact in Thailand instead of Japan.
Fuji Heavy, the maker of Subaru cars and owned 16.5% by Toyota, also said it would consider buying more parts from overseas and may transfer some production offshore.
It now expects an operating loss in the year to March, and cut its global sales target by 10 percent.
The picture is bleak in Europe too, with ministers meeting in Brussels on Friday to discuss support for the industry after the region posted a 17.8% drop in sales in December and the steepest full-year drop for 15 years.
France has already introduced a scrapping incentive for consumers trading in old cars, and made available 1 billion euros ($1.33 billion) in guarantees for the financing arms of PSA Peugeot Citroen and Renault.
French President Nicolas Sarkozy on Thursday promised "a lot of money" to help the sector, and the carmakers plus components makers Faurecia and Valeo, and tyre manufacturer Michelin will meet ministers on Tuesday.
Economy Minister Christine Lagarde said earlier in the week the government would likely announce moves to boost carmakers' capital. On Friday, she called for flexibility in EU state aid rules, though Sarkozy warned yesterday the manufacturers would have to make sacrifices to secure state help.