• American Insurance Group (AIG), the insurance giant that is already 80% owned by the U.S. government, is in discussions with the government for more federal funding so it can keep operating after next Monday, when it will report the largest loss in U.S. corporate history, CNBC reported. Sources close to the company told CNBC that the loss will be close to $60 billion.

• Both the Dow Jones Industrial Average and Standard & Poor’s 500 Index tumbled yesterday (Monday) to their lowest levels in 12 years.  The Dow fell 250.89 points, or 3.41% to close at 7,114.78 and the S&P 500 plunged 26.27 points, or 3.47%, to close at 743.33.

• No. 2 Japanese carmaker Honda Motor Co. Ltd. (ADR: HMC) – forecasting its first quarterly loss in at least 15 years – has named Takanobu Ito as its next president, Bloomberg News reported. The Tokyo-based company is watching its sales plunge in both Japan, and in the United States, its biggest market, thanks to the worst financial crisis since the Great Depression. Ito, 55, now global chief of Honda’s automobile division, succeeds Takeo Fukui, 64, in June. Fukui will become an advisor to Honda.

• Toyota Motor Corp. (ADR: TMC), the world’s biggest automaker, is prepared to set a 2009 production target of about 6.5 million vehicles, the lowest in six years, The Nikkei, Japan’s top business daily, reported yesterday (Monday). For the fiscal year that ends in March, Toyota is skidding towards its first net loss since 1950, due to precipitous sales declines in virtually every market – including the United States, Japan, Europe and even the emerging economies of Asia, BusinessWeek said. This reversal for the Toyota City-based firm follows seven years of aggressive expansion, and has led to an onogong management shakeup. Toyota also said yesterday that three executive vice presidents were retiring in June; last month, Toyota tapped a member of the founding family, Akio Toyoda, 52, grandson of the company founder, as president, replacing Katsuaki Watanabe

Source: Global Investment News Briefs Tuesday, February 24, 2009

Sales of cars, minicars, trucks and buses hit a 28-year low, falling 5%, or 5.08 million, from the 5.35 million sold in 2007, according to figures released by the Japan Automobile Dealers Association (JADA) and Japan Mini Vehicles Association, Bloomberg reported.

Worse, domestic auto sales in December totaled 183,549 vehicles – a 22% decline and the biggest drop on record – showing the sales crunch is a growing problem.

“We never imagined sales would fall this badly,” JADA Director Takeshi Fushimi said, Reuters reported. “This is a bleak situation.” Widespread job losses plagued the industry, sapping consumer demand and chopping hundreds of thousands of vehicles from sales tallies.

“The industry is going through a blizzard,” said Ichiro Takamatsu, chief investment officer at Alphex Investments Co., a Tokyo-based hedge fund, told Bloomberg. “In Japan, people don’t see cars as their status symbol anymore with this economic slowdown.”

According to JADA figures, Toyota sold 1.47 million vehicles in Japan last year, a 7.4% fall. Nissan’s sales came in at 537,553 units, down 5.8%.

Honda Motor Co. (ADR: HMC), however, sold 423,628 units – a 6.4% gain – partially because of higher demand for new and moderately priced models of the Fit compact and Freed compact minivan. The latter only sold domestically in its first year.

Last month, the Japan Automobile Manufacturers Association projected annual sales would fall again in 2009. It estimates that new automobile sales will fall to 4.86 million vehicles, which would be the first drop below 5 million in 31 years.

Source: Dour Demand Sends Japan 2008 Auto Sales Down Dramatically