KOITO Manufacturing Co, the world's largest maker of headlamps, slashed its net income forecast as plunging auto sales damp demand from car makers.

Net income will fall 71 percent to 3.4 billion yen (US$38 million) in the year ending in March, compared with an earlier forecast of 11.8 billion yen, Tokyo-based Koito said in a statement yesterday. It earned 15.6 billion yen a year ago. Koito cut its operating profit forecast 58 percent to 9.5 billion yen.

Koito follows Toyota Motor Corp, its largest customer, in cutting its earnings prediction as the deepening global recession keeps car buyers out of showrooms. Denso Corp and Aisin Seiki Co, Japan's two largest auto-parts makers, also slashed their forecasts after Toyota said on December 22 that it will post an operating loss for the first time in 71 years.

'Given car makers' large-scale production cuts, our profitability is deteriorating, forcing us to cut our full-year forecasts,' Koito said in the statement. Toyota's global production fell 27 percent last month led by a 55-percent drop in Europe. The decline is the biggest in at least two decades, according to the company. Honda Motor Co's production dropped 10 percent, and Nissan Motor Co's slid 34 percent.

Toyota said it may have a 150-billion-yen operating loss in the year to March 31 compared with an earlier forecast for 600 billion yen profit.

Koito rose 3.9 percent to close at 540 yen on the Tokyo Stock Exchange yesterday.