Honda says credit conditions haven't improved

By Soyoung Kim and Chang-ran Kim

DETROIT (Reuters) - A U.S. bailout of the financial industry has "not really improved" credit conditions and it is impossible to forecast U.S. industry auto sales for 2009, Honda U.S. executives said on Sunday.

Richard Colliver, executive vice president of Honda America, told reporters at the Detroit Auto Show that he was unsure if the world's largest vehicle market would ever hit annual sales of 16 million to 17 million units again.

He said Honda's priority is to reduce inventory and adjust production to lower demand.

U.S. auto sales hit a record 17.4 million in 2000. But sales fell 18 percent in 2008 from the prior year to about 13.2 million vehicles, battered by a spreading credit crunch, U.S. recession and plummeting consumer confidence.

Colliver said Honda plans to cut inventory at its U.S. dealerships to 65 to 70 days of supply in the next three months, from the current 100 days.

"We're not even forecasting because whatever we forecast, we would be wrong. If you look at the last 120 days, if that trend continues then we're looking at a significant reduction (from 2008)," Colliver said.

"Our biggest focus right now is to get control of our inventories at the dealership level and get production more in line with sales," Colliver said.

Like rivals, Honda has been hurt by the plunge in car and truck sales in the U.S. that worsened in October and November amid tightening credit and deepening consumer uncertainty.