By Sachi Izumi

Subaru maker Fuji Heavy became the latest auto firm to forecast losses this fiscal year as a spreading global recession dampens demand in mature markets and puts the brakes on sales in emerging markets.

The economic woes are also affecting motorcycle demand, and Yamaha Motor said it would halt production at 11 plants for up to 10 days.

Toyota Motor's announcement of output cuts at North American plants followed General Motors' warning that its U.S. auto sales this year would hit the lowest in 27 years.

Toyota, which expects a first ever annual operating loss this business year, said its inventory of North American-built vehicles was 80-90 days, having doubled in the past year. It hopes to cut that by half in the second quarter.

"The current inventory level is a record high for Toyota, though the market slump is unprecedented so rising inventories are unavoidable," said Okasan Securities analyst Yasuaki Iwamoto.

"Sales are falling 30-40 percent every month, and this pace of fall is unheard of for either Toyota or the overall industry," he said. "Automakers have to cope with it through production cuts as quickly as possible."

Toyota has previously said it will halt production at its Japanese plants for 11 days in February and March.

The world's biggest automaker had already reduced North American production of its best-selling cars, including the Camry and Corolla sedans, and suspended work on a new plant in Mississippi that was due to start producing the popular Prius hybrid from 2010.

HONDA, NISSAN SCALE BACK

Honda said it would reduce its domestic output by an additional 56,000 units, expecting its Japan production to total 1.168 million units this business year to March, against its original target of 1.31 million.

Nissan also announced further output cuts in Japan on Thursday and a source said it would book an annual operating loss.

Nissan was aiming to cut production costs by 30 percent by making its March subcompact in Thailand instead of Japan, the Nikkei newspaper reported on Friday.

Shares in Toyota and Honda jumped 6 percent and 8 percent respectively, helped by a weaker yen. Nissan added 3.8 percent, outperforming the Nikkei average's 2.6 percent rise.

TOUGH ENVIRONMENT

Poor sales and the yen's sharp rise led Toyota to forecast last month its first-ever annual operating loss, and prompted the company's 2,200 general managers to voluntarily commit to buying its cars by the end of the business year.

Toyota's sales in the United States, its key market, fell 37 percent in December.

"This is a tough environment, and it may continue for a while," Jim Wiseman, vice president of external affairs for Toyota Motor Engineering & Manufacturing North America, said.

"In addition to slowing production, we are redoubling efforts to cut costs at each of our facilities," he said, adding further action may be needed to cope with falling sales and rising stocks.

Toyota spokesman Yuta Kaga in Tokyo declined to disclose the actual number of vehicles involved in the planned production cut.

The latest move sets non-production days over the next few months at its manufacturing facilities in Canada and in Kentucky, California, Texas, Indiana, West Virginia and Alabama.

Fuji Heavy, the maker of Subaru cars and owned 16.5 percent by Toyota, also said it would consider buying more parts from overseas and may transfer some production offshore.

It is also scrapping plans to build a new plant for cars to be jointly developed with Toyota.

"It's hard to determine outlooks for not just the coming year to March 2010 but also the running fiscal year," Fuji Heavy President Ikuo Mori told reporters.

Fuji Heavy now expects an operating loss in the year to March, instead of a previous profit forecast, and lowered its global sales target by 10 percent.

In South Korea, cash-strapped sport utility vehicle maker Ssangyong said it would restart production on Friday after imposing an across-the-board suspension from Tuesday due to a shortage of parts.

(Additional reporting by Nichola Groom in LOS ANGELES, Cheon Jong-woo in SEOUL and Yumiko Nishitani in TOKYO; Editing by Michael Watson and Lincoln Feast)