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Global Recession Smashes Asian Automakers

Japanese car companies are slamming the brakes on production, faced with fading demand for automobiles both at home and abroad.

The Japan Automobile Manufacturers Association says Thursday vehicle production fell 20 percent last month (November) compared to the year before. The industry group says that is the biggest decline since it began keeping records more than 40 years ago.

Japanese economists had expected a drop in production because of the troubled U.S. economy, which is also the biggest market for Japanese vehicles. However, some industry analysts say the drop in production for the Japanese auto market could be an indication that the same problems that nearly crippled the U.S. auto industry are spreading.

Earlier this week, Toyota - Japan's largest carmaker - announced its domestic output plunged 27 percent, and that it expects its first net operating loss in 71 years.

In a bid to revive domestic sales, Toyota - along with Daihatsu Motor Company - Thursday unveiled a new, compact minivan. Officials say the vehicle will seat seven people and is aimed at mothers with young children who have "active and exacting" lifestyles.

The carmaker also suspended work at a truck plant in the southern U.S. state of Texas and stopped construction on a hybrid plant in the southern U.S. state of Mississippi.

South Korea's top two automakers, Hyundai Motors and Kia, have also slashed sales forecasts by 12 percent because of the global recession.

The Indian auto industry is responding to a drop in sales by cutting shifts at its auto factories, and some foreign automakers are scaling down plans for expansion.

French President Nicolas Sarkozy says he will unveil a new plan next month to help his country's struggling auto industry.

Earlier this month, the U.S. approved billions of dollars in loans for two of the country's biggest automakers. General Motors and Chrysler had warned they might collapse within weeks without government aid.

Some information for this report was provided by AP.