Japan's Car Makers Changing North American Plans

TOKYO, March 15, 2008; Reuters reported that major Japanese automakers are changing their production plans in North America as the economy there slows, with Honda Motor Corp even halting truck production in Canada, the Nikkei business daily said on Saturday.

Carmakers have been hit particularly hard by recent signs of a possible recession in the United States, and the dollar's fall against the yen has helped push their shares sharply lower.

Honda will stop making pickup trucks in Canada at the start of next year, switching such production from a plant in Ontario to a plant in Alabama, and instead increase production in Canada of small cars that are selling well, the Nikkei said.

Toyota Motor Corp will decrease production at a plant in Indiana by roughly 10 percent, while Nissan Motor Co is already decreasing production at two U.S. plants.

Japanese exporters, such as car makers, suffer when the yen strengthens as Japanese goods become less competitive overseas and the strong yen eats into profits when they are repatriated.

But the Nikkei reported that several firms, including Nissan and Mitsubishi Motor plan to take advantage of the cheaper dollar to expand their exports from the United States.

Mitsubishi Motor plans to export U.S.-made cars to China and the Middle East, and expand its exports to Russia, while Nissan plans to expand exports to the Middle East.

Reporting for Reuters by Elaine Lies; Editing by Ben Tan