2009 is going to be worse than 2008: Automakers are going for more production cuts and layoffs

The auto-industry is already infested by production-cuts and layoffs in the face worldwide economic recession but 2009 is going to be worse than 2008. According to latest news reports, major Japanese automakers are going to further cut down their production and layoff temporary workers.

Honda Motor Co., Ltd. (TYO: 7267) is going to cut down production to 1.17 million in the current fiscal year ending in March. Honda will also layoff 3100 of its temporary workers in Japan in April. Honda's major rival, Toyota Motor Corporation (TYO:7203) is cutting down production till April 2009 in its U.S. and Canadian plants. Toyota will also layoff 5,000 temporary workers in its Japan and US manufacturing plants. The company is facing its first operating loss in the last 71 years.

Fuji Heavy Industries Ltd. (TYO:7270), the producer of Subaru cars, and Yamaha Motor Co., Ltd. (TYO:7272) also declared to cut down their production. Due to economic crisis, worldwide sales of automobiles has decreased significantly. North America, which is considered to be the largest market in the world, is in a terrible condition. Analysts are saying that auto sales may hit "a 27-year low" in 2009. On January 15, 2008, General Motors Corporation (NYSE:GM) said that sales of automobiles in USA would drop to 10.5 million in 2009.

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Bloomberg