Automakers gear up for long slowdown

By Kim Yeon-hee and Peter Dinkloh

SEOUL/FRANKFURT (Reuters) - Car and truck makers around the world signaled fresh production cuts and job losses on Wednesday with some warning the slump in demand may extend until 2010.

"It would be wrong to assume that this economic downturn is short-term in nature and will be over in only six months," said Hakan Samuelsson, chief executive of German industrial group MAN AG (MANG.DE).

MAN plans to cut output by 30 percent at its core truck making business next year.

The global financial crisis is making consumers increasingly reluctant to part with cash and lenders unwilling to offer credit, causing carmakers across the world to struggle to find buyers to keep their production lines running.

Matthias Wissmann, president of VDA auto industry association, told Reuters that new vehicle registrations could recover by 2010 but sales would fall to post-reunification lows in 2009.

"The situation on global passenger car markets is dramatic," he said.

NOVEMBER SALES PLUNGE

All major automakers have reported double-digit declines for U.S. auto sales in November, hurt by the plunge in consumer confidence brought on by the turmoil in the financial markets and a weakening U.S. economy.

South Korea's top carmakers Hyundai Motor (005380.KS) and Kia Motors (000270.KS) both said they had cut U.S. production levels after posting a 40 percent and 37 percent drop respectively in U.S. November car sales versus a year ago.

India's largest motorbike maker, Hero Honda Motors Ltd (HROH.BO), meanwhile, said it sees sales remaining under pressure as consumers struggle to raise finance to buy new machines.

Hero, in which Japan's Honda Motor Co (7267.T) has a 26 percent stake, said it hopes to stick to the production plans it outlined at the beginning of the year. Statistics from the Society of Indian Automobile Manufacturers showed production of scooters and motorcycles in India down 15.7 percent in October from a year ago.

While some car makers have delayed the development or launch of new models because of the global industry crisis, Alfa Romeo, Fiat's (FIA.MI) sports car brand, said it will go ahead next year with the launch of the 149 hatchback as the successor to its 147 saloon.

Alfa Romeo Chief Executive Luca De Meo said the launch will take place despite Fiat temporarily halting production because of a dramatic cut in demand.

"The 149 is confirmed for the fourth quarter (of 2009)," De Meo said at the Bologna Motor Show.

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