HONDA Motor Co, Japan's second-largest auto maker, has cut its 2008 United States sales forecast by 4.1 percent because of the faltering economy, predicting the first decline in the country in 15 years.

The company expects to sell 1.51 million vehicles for the 12 months ending in December 31, compared with its earlier estimate of 1.575 million vehicles, Chief Financial Officer Yoichi Hojo said in an interview with Bloomberg News in Tokyo yesterday. The sales decline will be 2.6 percent from 1.55 million vehicles in 2007.

Rising unemployment and tighter consumer lending are hampering demand for new vehicles, spurring Tokyo-based Honda to cut its fiscal year operating profit forecast by 13 percent last month. Industrywide US auto sales plummeted to the lowest monthly total in more than 17 years in October.

'The deepening financial crisis ruined Honda's bet on the Fit and other new models to spur US sales,' said Hirofumi Yokoi, a Tokyo-based analyst at auto-consulting company CSM Worldwide. 'No one can escape the collapse in demand.'

Honda on October 28 reported a 41-percent drop in fiscal second-quarter profit as vehicle demand in the US plunged and the yen gained against the US dollar, eroding the value of exports. The company cut its full-year earnings forecast.

Honda rose 0.8 percent to 2,420 yen (US$24.3), trimming its earlier gain of as much as 4.4 percent, at the close on the Tokyo Stock Exchange. The stock has fallen 35 percent so far this year.

Falling demand

In response to falling demand, Honda is making additional production cuts in the US. Honda will shift North American manufacturing of most V-6 Accord sedans to Lincoln, Alabama, from Marysville, Ohio, in mid-2009 and pare scheduled output of Odyssey minivans and Pilot sport-utility vehicles in Lincoln by an additional 22,000 units, the company said on October 13.