Honda Motor Co's domestic car production in fiscal 2009 is expected to decline by about 30 percent compared to its all-time peak, to about 900,000, sources said.

Honda has asked auto parts manufacturers - the company's main suppliers - to cut their fixed costs, including personnel, maintenance and operating costs of domestic plants, by about 30 percent, it was learned.

The company made this decision after concluding it would be difficult to achieve a major recovery even if the economy fully recovers, they said.

Honda itself will have to cut production lines and reduce its workforce in the future. The domestic manufacturing sector will be further hollowed-out if Honda moves to reduce its domestic production, observers said.

Given such factors as the population decrease, the strong yen and the drive to reduce greenhouse gas emissions, Honda predicts the decline in domestic production - which has dropped by 30 percent on the basis of sales compared with figures from before the global economic slump - will be protracted, the sources said.

The company also asked the auto parts manufacturers to reinforce their capital investment mainly in foreign countries.

Due to the slump in car sales at home and abroad caused by the worldwide recession, Honda's domestic production in the April-June quarter of fiscal 2009 on the basis of sales declined by 35.9 percent to 736.5 billion yen (S$11.2 billion) compared from the same period of the previous year.

The slump in Honda's sales has led to a cut in the domestic auto parts production of about 30 per cent.

--The Yomiuri Shimbun/ANN