UPDATE 1-Honda:needs export markets to keep Japan output
* Hard to export to U.S. if dollar falls further - CEO
* Need other export markets to sustain domestic output - CEO
* Shares drop 0.9 pct, Nikkei average down 0.3 pct (Adds background and share price)
CHIBA, Japan, Oct 21 (Reuters) - Honda Motor Co (7267.T) will need to secure key export markets other than North America to sustain Japanese production levels if the dollar weakens further, Chief Executive Takanobu Ito said on Wednesday.
North America is the biggest export market for most Japanese carmakers including Honda and rival Toyota Motor Corp (7203.T), and yen strength against the dollar hurts the profits on cars exported from Japan.
"It will be hard to export to North America if the dollar falls further against the yen," Ito told Reuters Television in an interview at the Tokyo Motor Show.
"We will need to find export markets other than North America to keep our domestic output levels."
Honda is assuming an average dollar rate of 91 yen in the financial year to March 2010, roughly in line with the current forex rate. JPY=
Shares of Honda dropped 0.9 percent to 2,755 yen. The benchmark Nikkei average .N225 was down 0.3 percent. (Reporting by Kei Okamura, Yoshifumi Takemoto and Nobuhiro Kubo)
