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Japan carmakers slash production

Honda S2000
Japanese firms have not discussed a government bailout

The Japanese carmaker Honda has announced further cuts in production in Japan and Europe as it continues to struggle with a slump in sales.

The firm has now reduced its global annual output by nearly 150,000 vehicles due to the economic downturn.

Rival carmaker Toyota has announced plans to cut its domestic temporary workforce in half.

The news came as the government again downgraded its assessment of Japan's economic outlook.

Production will stop temporarily at Honda factories in Japan and the UK.

Its UK plant, at Swindon in Wiltshire, will be closed for two months in February and March next year in response to falling sales.

The 500 people who work there will not be paid.

Toyota is planning to shut down all its North American factories for two days next month and it is laying off half its temporary workers in Japan, although so far it has avoided cutting any of its permanent employees.

Many small companies that supply it with parts and services could also find themselves in trouble.

And Nissan - once regarded as one of the world's most profitable firms after a huge restructuring and a successful partnership with the French firm Renault - has warned that its profits will fall to zero because of the financial situation.

Malaise

The Japanese are renowned for their efficient factories and diligent staff, but all the hard work hasn't stopped the nation's car industry sliding into a mood of deep malaise as sales slump around the world, reports the BBC's Duncan Bartlett in Tokyo.

While American carmakers have appealed to their government for emergency funds to keep them in business, so far the Japanese firms are trying to get by on their own. No bailout plan is being discussed with the government in Tokyo.

However, the industry's plight is causing considerable concern and raises the very real fear that it will push Japan deeper into recession, our correspondent says.



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