Japanese set for rare downbeat Detroit car show

DETROIT (Reuters) - What a difference a year makes.

This time last year, Japanese auto executives asserted confidently they would keep snatching a bigger chunk of the U.S. market as their Detroit rivals executed turnaround plans and prepared further production cuts to match dismal demand.

That seems a distant memory as industry officials descend on Detroit in the coming days for what will be a smaller, far more downbeat North American International Auto Show after U.S. vehicle sales ended 2008 at a 16-year low with even the once-unstoppable Japanese recording sharp declines.

Three of them -- Nissan Motor Co <7201.T>, Mitsubishi Motors Corp <7211.T> and Suzuki Motor Corp <7269.T> -- have pulled out of this year's show altogether, and others are set for a low-key presence. In a departure from past practice, few executives from Japan will attend the show, as hard economic times have made cost-cutting the name of the game.

Even Honda Motor Co <7267.T>, the U.S. market's fifth-biggest brand, will have a booth but no press conference, foregoing an opportunity to play up the debut of its all-important new Insight -- the first of its next generation of low-cost hybrid cars.

"It was out of consideration for the Big Three," said CEO Takeo Fukui, who will skip the annual show for the first time since taking the helm at Honda in 2003.

"The Detroit show is an important one for the United States, but it's the Big Three's backyard and we thought it would be brash to go out there with a bang given the circumstances," he said last month.

The circumstances, indeed, are bleak.

General Motors Corp , Chrysler LLC and Ford Motor Co are bleeding cash at a perilous pace as sales slide. The White House last month offered GM and Chrysler emergency loans of up to $17.4 billion, providing a short-term lifeline on the condition that they undergo a sweeping restructuring.

Ford has sought access to a $9 billion line of credit that it could tap as insurance against the market worsening.

NO MERCY

Still, not a single automaker has been spared the market's collapse.

While faring better than average, Toyota Motor Corp <7203.T>, Honda and Nissan all saw their U.S. sales fall last year to end multiple years of expansion.

Toyota, which had the biggest drop of the three, said it had no idea when the economy would hit bottom, bracing for a tougher year ahead in the United States, its single-biggest market. With the woes spreading to the rest of the world, Toyota is forecasting its first-ever operating loss for the business year to March 31.

Toyota President Katsuaki Watanabe declined to hazard a guess on what the overall U.S. market would amount to this year, saying only that he hoped it would reach 12.5 million units. Most analysts deem that level optimistic after sales only reached 10.3 million on an annualized rate in December.

"We want to defend our current market share and it would be best if we could top it a bit," Watanabe said in Tokyo this week.

"But more than that, I'm hoping that the market itself would recover, and I have great expectations for the Obama administration to take the necessary steps," he said.

Toyota will unveil two new hybrid cars in a world premiere at the Detroit show: the third-generation Prius and the first dedicated hybrid model for its Lexus luxury brand. Such models would have been an instant hit just six months ago when gasoline hit an all-time high above $4 a gallon, but will do little to help reverse a decline in sales this year, analysts said.

"The timing is horrible," Credit Suisse auto analyst Koji Endo said.

"The market is awful and gasoline is cheap," Endo said. "It's better than nothing, but the momentum toward better fuel efficiency has waned from those days."

National retail gasoline prices averaged $1.68 a gallon last week, according to the Federal Energy Information Administration.

Without an economic recovery or drastic steps to stimulate demand, few expect the sales downward trend to reverse.

"No matter how much we pile on the incentives -- zero percent financing or anything else -- our market share of 6, 7 percent won't move much in these conditions," Nissan Chief Operating Officer Toshiyuki Shiga said this week.

"If the big players like GM and Ford move, then there's a chance that the market will, too. I just don't think the current demand levels will continue -- it's unthinkable," he said.

(Editing by Bernard Orr)