Honda cuts U.S. output amid GM, Chrysler woes

TOKYO/DETROIT (Reuters) - General Motors faced a rising bankruptcy risk and Chrysler raced to secure its survival as Honda <7267.T> moved on Wednesday to cut output in North America and car sales in Asian markets tumbled.

In Europe, incentives encouraging cash-strapped consumers to ditch old cars in favor of new models bore some fruit, with more than 860,000 applying for the measure in Germany and French car sales rising sharply.

Crisis-hit GM's shares plunged after the struggling U.S. manufacturer said there was a rising chance it could file for bankruptcy by June, as teams began to implement a tough restructuring for the sector dictated by President Barack's Obama's administration.

Renault said overall sales for the French market rose 8.1 percent in March. France's number two manufacturer behind PSA Peugeot Citroen , said its own sales were up 12.8 percent, helped by a scrapping incentive.

French car equipment supplier Faurecia's CEO told a newspaper that carmakers had stopped cutting sales and output forecasts, although he warned that the industry's recovery would be long and gradual.

The French carmakers' association CCFA was due to publish more detailed March results for France later in the day, while Italian car sales for March were also set for publication later.

U.S. auto sales data also due on Wednesday were expected to show a 40 percent fall in March from a year ago, and the picture from Asia was equally gloomy.

South Korea's five automakers in March posted an 18.8 percent drop in sales to 402,563 vehicles, with exports down 19.9 percent.

Hyundai's <005380.KS> overall sales in March lost 9.8 percent compared with the same period a year earlier, and its overseas sales fell 7.9 percent.

In Japan, overall auto sales slumped 25.3 percent in March.

However, Honda shares rose after the automaker said it would cut production in the U.S. by temporarily shutting factories, and would cut pay for workers as U.S. sales plunge to multi-decade lows.

Fiat CEO Sergio Marchionne flew to Detroit for talks with Chrysler unions and creditors after President Obama gave them 30 days to forge a partnership to save the ailing U.S. automaker.

In Spain, declines in car sales eased to 38.7 percent in March year-on-year after a 48.8 percent drop in February, partly due to a government stimulus plan, carmakers association Anfac said.

(Additional reporting by John Crawley, Emily Chasan, Walden Siew, David Bailey, Marcel Michelson, Matthias Blamont, Kevin Krolicki, Soyoung Kim; Writing by Helen Massy-Beresford; editing by John Stonestreet)