'Japan carmakers may merge'

Japanese automakers may combine to form three large companies as a worsening global recession hurts vehicle demand, Osamu Suzuki, president of Suzuki Motor Corp., Japan’s second-largest minicar maker, said in a Nikkei interview.

“The crisis facing the US Big Three will hit Japan later, delayed like a tsunami, probably around July or August next year,” Suzuki said in the interview published today. “Japan’s auto industry, now consisting of more than ten companies, may consolidate into a ‘Big Three.’”

Toyota Motor Corp., Japan’s largest carmaker, this week predicted its first loss in 71 years, and rival Honda Motor Co. cut its profit forecast as the slowdown damps demand for cars. General Motors Corp., Ford Motor Co. and Chrysler LLC, the three-biggest US automakers, have cut output and two of them received $13.4 billion of federal aid to prevent running out of cash.

Suzuki slashed production 10 percent last month as demand at home and overseas declined. Toyota on Wednesday said its global output last month plunged 27 percent, the most in at least two decades, after consumers in Europe and the US deferred purchases.

Japan’s vehicle sales next year may fall to the lowest in 31 years as unemployment, an aging population and the slowing economy keep drivers out of showrooms.

Japanese automakers’ shares have declined along with sales this year. Toyota has fallen 54 percent, Honda 51 percent and Suzuki 65 percent.

A recovery of the domestic auto market hinges on an industrywide strategy to make driving more appealing to young people, Suzuki said.

“The auto industry needs to restructure methods of selling cars, the way Yamaha nurtured children’s interest in pianos by expanding into piano schools,” he said, referring to marketing techniques used by instrument maker Yamaha Corp.