WRAPUP 1-Honda cuts more production, Nissan ratings lowered

Honda Motor Co said it would build fewer cars in Japan, Europe and North America to reflect an increasingly bleak outlook for sales as the global economic crisis discourages big-ticket purchases.
 
Automakers around the world are suffering from a severe and deepening downturn in demand, eating away at cashflow and threatening the future of Detroit's Big Three automakers -- General Motors, Ford Motor and Chrysler LLC.
 
On Friday, Fitch Ratings downgraded the long-term debt ratings of Nissan Motor Co to BBB-plus from A-minus, assigning a negative outlook citing its dependence on the flagging U.S. market.
 
Honda, Japan's No.2 automaker said it would cut output at its Saitama factory near Tokyo by 40,000 vehicles due to slow sales of Accord sedans, mainly bound for North America and Europe.
 
It will also chop production by an additional 21,000 cars at its UK factory, bringing the total reduction there to 53,000 units in the year to March 2009, more than 20 percent of annual capacity.
 
The latest move follows Honda's announcement that it would cut another 18,000 cars in the United States, and brings the output reduction to 150,000 cars globally for 2008/09.
 
At the start of the business year in April, Honda had planned to sell 4.14 million cars. It does not provide a production forecast.
 
ET TU, HONDA?
 
Fitch's rating cut for Nissan was its first since Standard & Poor's reduction in early 2000.
 
"The extraordinarily rapid appreciation of the yen, together with (Nissan's) historically smaller focus on compact cars compared to its Japanese peers, combine to increase the difficulties for Nissan," Fitch Director Tatsuya Mizuno said.
 
Fitch lowered its rating on Nissan's French partner, Renault SA, to BBB from BBB-plus.
 
Honda, with its car-heavy line-up including the Civic, Accord and Jazz/Fit, had been largely immune to a downturn in the U.S. market that had mainly ailed the light trucks segment of fuel-guzzling vehicles.
 
But spreading economic woes have attacked the broader market in recent weeks, pushing down U.S. sales of the Accord. In Europe, Honda has been hit hard as demand dried up for bigger diesel cars -- until recently a strong driver for local sales.
 
With the latest cuts, Honda's Swindon factory will be closed for a total of 50 days between December and the end of the business year, shutting down for the entire months of February and March.
 
Honda said it would discuss what to do with the workforce during the stoppage with the union, declining to give further details.
 
A spokeswoman also declined to comment on the likely impact on Honda's annual profits, which were revised down by 12 percent at the end of last month.
 
"We will provide any updates in January along with third-quarter results," she said.

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