TOKYO (AP) -- Honda Motor Co. said Wednesday it will delay the start of production at its first plant in Argentina for more than six months in the automaker's latest step to cope with a plunge in sales amid a deepening global downturn.
Japan's No. 2 automaker has invested about $100 million in the factory, which was initially scheduled to begin operations in late 2009 with annual production capacity of 30,000 units.
Honda spokesman Hideto Maehara said the new plant, which is still being built, will not start operating until mid-2010.
"We have to adjust our production as demand in the global auto market continues to fall sharply," he said. "Car sales have been very weak around the world, and we don't really know when the market recovers."
Apart from selling in Argentina, Honda planned to export vehicles to Brazil from the new plant. Maehara said the Argentine factory will employ 800 workers.
Battered by sluggish sales worldwide, Honda had already announced it will halt expansion in Japan as well as abroad, including Turkey and India. The Japanese auto giant also said last year it will quit backing a team in the high-cost Formula One competition.
Japan's No. 1 automaker, Toyota Motor Corp., said Tuesday it is suspending production at all 12 of its Japan plants for 11 days over February and March, a stoppage of unprecedented scale for the company as it grapples with shrinking global demand.
Faced with the global downturn, Honda has slashed its earning forecast, expecting 185 billion yen ($2 billion) in group net profit for the fiscal year ending March, 2009 -- less than a third of the 600 billion yen it earned last fiscal year.
Honda's president and chief executive, Takeo Fukui, said Monday the U.S. downturn and the weak dollar were to blame for a prolonged slump in auto sales. A weak dollar hurts Japanese exporters like Honda by eroding their dollar income from abroad.
