Senior managing director Takanobu Ito, 55, will replace Takeo Fukui at the helm, the Tokyo-based company said. Fukui, 64, will remain on the board and serve as director and advisor to Honda Motor.

An industry analyst said the company had likely decided to replace Fukui because he is nearing retirement age rather than due to his performance, which is seen as praiseworthy.

Honda Motor is the only major Japanese automaker forecasting a profit for the current fiscal year to March.

But it said last month that its net profit had dived 89 percent in the October-December quarter and it plans to dramatically reduce production.

The company said that Ito would become its seventh president and chief executive following its annual shareholders’ meeting set for late June. Ito joined Honda in 1978 and currently oversees its automobile operations.

Analysts noted that Fukui was nearing his retirement age and had managed to keep Honda in better shape than many rival carmakers.

“I don’t think Fukui is stepping down to take responsibility for the current situation,” said Tairiku Sakaguchi, an auto analyst at Shinko Securities.

“At the same time I have the impression (Honda) is trying to set up a new structure to defend itself amid current the business conditions.”

“Honda’s profitability amid the global downturn can be attributed to Fukui. While other automakers around the world are being hit by the slump, his ability to preserve profitability is praiseworthy,” Sakaguchi said.

Honda last month reported a 5.1 percent drop in automobile sales in the quarter to December to 940,000 vehicles, but it said it was able to remain in the black, in part thanks to solid motorcycle sales.

“While Honda has slashed its annual earnings forecast and business conditions are expected to worsen, its earnings result will likely be better than those of other carmakers such as Toyota,” Sakaguchi said.

Honda is not the only Japanese automaker changing its head during the deepening industry crisis. Toyota Motor last month named Akio Toyoda, the 52-year-old grandson of its founder, as its new president.

Automakers around the world have been hit hard by slumping demand as rising unemployment and a credit crunch deter people from buying cars.

Japanese carmakers have not been immune to the downturn, although they remain in better shape than their US rivals such as General Motors and Ford.

Yoichi Amano, head of the Japan Automobile Dealers Association, said Monday that domestic sales of vehicles excluding mini-vehicles could fall below three million units in 2009, the Kyodo news agency reported.

In 2008 sales fell to a 34-year low of 3.21 million vehicles, down from a peak of nearly 6.0 million units in 1990, according to the association.

– AFP /ls

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“The reality is that talks are proceeding with great difficulty,” Honda Motor president Takeo Fukui said.

Honda has received several proposals, “but actually there are very few who are serious about buying it,” he said at a new conference to announce his retirement in June.

The Japanese carmaker announced its shock withdrawal from F1 in December because of the financial crisis, leaving the future of drivers Jenson Button and Rubens Barrichello in limbo.

Honda has not ruled out the option of disbanding the team, but says it still hopes to reach a deal in time for the start of the next season on March 29.

Racing “is very challenging but also fun,” said Takanobu Ito, the 55-year-old engineer who will replace Fukui.

“Unfortunately, our company has a slight cold right now. But we would like to cure this cold as quickly as possible and work towards reaching that happiness” of racing, he said.

Last week Japan’s second largest automaker said that it was in talks with potential buyers including British tycoon Richard Branson’s Virgin Group.

Honda Racing chief executive Nick Fry and team principal Ross Brown are also reported to be leading a management buyout bid for the British-based team, which employs roughly 700 people.

Formula One supremo Bernie Ecclestone told Britain’s News of the World that the Honda Racing bosses had rejected his offer of 100 million pounds (145 million dollars) to help rescue the team, preferring to go it alone.

Honda first competed in F1 in 1964 and has clocked up three Grand Prix wins as a full works team. Its engines have also been behind dozens of victories by stars such as world champions Ayrton Senna and Alain Prost. – AFP/de

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The Japanese-owned Honda outfit have quit F1 due to financial problems caused by the recession in the car market.

Ecclestone stepped in to help with a management buy-out launched by team principal Ross Brown and chief executive Nick Fry in an attempt to keep the organisation alive.

But Ecclestone, who wanted Brazilian Bruno Senna, nephew of the late world champion Ayrton to drive for Honda, revealed on Sunday that his offer was rejected.

“I tried to help with the management buy-out. They should have taken what I offered,” Ecclestone told the News of the World.

“It was a very good offer for everybody concerned. It gave them complete protection but they wanted to do things on their own. Now all we can do is hope and pray.

“I don’t think anybody knows what is going to happen with Honda. It’s up to them to make up their bloody minds.

“But the team can go one of three ways. They either go with the management buy-out, sell to Richard Branson or they simply just close down the whole thing.”

Billionaire Virgin owner Branson has had talks with Honda’s bosses and insisted he is keen to get involved.

“I love F1,” Branson said. “With the Virgin brand expanding on a global basis, it is certainly something that is attractive.

“But there are faults in F1 that would need to be rectified. We would need to be sure Bernie Ecclestone is running it so the teams can make ends meet and we would need to be sure he is on a path to try to turn F1 into a sport that is championing green technology.

“It would be great fun and something might get sorted.” – AFP/de

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Formula One ringmaster Bernie Ecclestone disclosed this week that he has “spoken to Richard’s people” about sponsoring Honda who have pulled out due to the global economic crisis.

And when tackled on that Saturday, the maverick multi-millionaire, who has already invested heavily in planes and trains, made it clear he now has automobiles firmly in his wing mirrors.

Branson told Sky News: “Maybe one day we might see Virgin and Formula One connected.

“But if we were talking (to Honda) I wouldn’t be allowed to say, so it’s not a categorical no, or a categorical yes.”

Branson said that before he did step into the fast lane, F1 would have to tackle a number of issues.

“There are some aspects needed to be tackled. The price of running a Formula One team is astronomical and in this market place that’s an issue.

“And Formula One should be pioneering green technology and trying to spend a lot of its time and effort in showing that cars can be run as green cars.

“Those two areas would be prerequisite.”

Earlier he had told BBC: “I love grands prix.

“If Bernie Ecclestone can make it more cost-effective for the likes of the Virgin brand to come into the sport, and if he can champion clean motor-car racing, which is possible to do by making sure all the cars run on clean fuels, at some stage we might be interested in getting involved.”

The deadline for an agreement to buy-out Honda, which is based in England, is believed to be next week, one month before the 2009 season’s first race in Melbourne.

Aside from Branson, the other possible future for Honda is a management buy-out led by Honda Racing chief executive Nick Fry and team principal Ross Brawn.

Honda on Wednesday said it was talking to several potential buyers for its Formula One team, and named Branson’s Virgin Group as one of them.

“We are negotiating with several potential buyers for the racing team, among which is the Virgin Group,” a Honda spokesman said, declining to name the other interested parties.

“We are doggedly pursuing negotiations in time for the start of the F1 season in March,” said another Honda official who declined to be named.

“We are intensely discussing options including finding a buyer,” he said, adding that the team may still have to be disbanded if the negotiations fail.

Honda first competed in F1 in 1964 and has clocked up three Grand Prix wins as a full works team. – AFP/ms

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Sepang International Circuit (SIC) chairman Mokhzani Mahathir said that Formula One boss Bernie Ecclestone had agreed to a start time of 5:00 pm, two hours later than previously.

“We have amended the contract. The race will start at 5:00 pm. It is another way of saying that there will be no night race until 2015,” he told reporters.

Mokhzani said the new race time will still enable fans in Europe to watch the race scheduled for April 5, and was expected to attract more locals to the track in the cooler late afternoon.

It will be the second race for the 2009 season after Australia. The start time for the Melbourne race will also be 5:00 pm.

Mokhzani said the cost of lighting up the Sepang circuit was “prohibitive” in the current global economic environment.

“Bernie said to me that ‘we will no longer raise the issue’. I told him that we are facing an economic crisis. The night race may or may not attract more people to the circuit,” he said.

Mokhzani said however that despite the global economic gloom, some 120,000 people are expected at the Sepang circuit this year.

“We are experiencing an economic slowdown. But we are offering attractive packages and activities to attract spectators,” he said.

Malaysia held its first Grand Prix in 1999. Under a new contract signed last year, in which it agreed to be prepared to do night racing, Malaysia will continue to host races until 2015.

Last year neighbouring Singapore hosted the first F1 night race, while Dubai will make its debut this year. – AFP/vm

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The Japanese carmaker, which announced its shock withdrawal from F1 in December because of the financial crisis, said it hoped to reach a deal in time for the team to be on the grid at the start of next season on March 29.

“We are negotiating with several potential buyers for the racing team, among which is the Virgin Group,” a Honda spokesman said, declining to name the other interested parties.

Honda’s exit from Formula One raised fresh fears over the future of the multi-million-dollar sport, which is struggling to keep afloat in the current credit crunch.

“We are doggedly pursuing negotiations in time for the start of the F1 season in March,” said another Honda official who declined to be named.

“We are intensely discussing options including finding a buyer,” he said, adding that the team may still have to be disbanded if the negotiations fail.

Honda Racing chief executive Nick Fry is also reported to be leading a management buyout bid for the British-based team.

Honda first competed in F1 in 1964 and has clocked up three Grand Prix wins as a full works team. Its engines have also been behind dozens of victories by stars such as world champions Ayrton Senna and Alain Prost.

– AFP/so

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Raikkonen, who clocked a best lap of 1min 32.102sec from his 107 circuits, was faster than Jarno Trulli of Toyota and Sauber’s Nick Heidfeld.

In fact, Raikkonen’s time was the fastest lap since the three teams started testing at the circuit on Tuesday last week.

Trulli clocked 1:32.230 from his 149 laps in his new car for 2009, which he described as “competitive” and “reliable,” adding: “This gives us a solid base for the season to come.”

Best times in Bahrain

Kimi Raikkonen (FIN) Ferrari 1:32.102 (107 laps)

Jarno Trulli (ITA/Toyota) 1:32.230 (149)

Nick Heidfeld (GER/Sauber) 1:32.585 (104)

– AFP /ls

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New data released showed the Japanese economy, the world’s second largest, shrank for a third straight quarter in the three months to December.

It was the weakest performance since 1974 when the country was reeling from the first oil crisis, and the government said this slump would be even worse.

“This is the worst-ever crisis in the post-war era. There is no doubt about it,” Japanese Economic and Fiscal Policy Minister Kaoru Yosano said.

The news came after a weekend meeting of the Group of Seven — Britain, Canada, France, Germany, Italy, Japan and the United States — which urged bold reforms to the world financial system and painted a bleak picture of the economy.

The G7 finance officials “appear to fully recognize the gravity of the current situation, and they have said the right things about the actions that need to be taken,” said Bill Witherell, economist at Cumberland Advisors.

But he added that “the good words need to be matched by deeds, by prompt and effective action.”

Chinese President Hu Jintao warned the crisis was deepening and India’s acting finance minister Pranab Mukherjee said “extraordinary economic circumstances” meant India had to ramp up its budget spending.

“The impact of the crisis on economies around the world is still deepening and its grave consequences will be felt more in the days to come,” Hu said in the Tanzanian capital Dar es Salaam during a tour of Africa.

Meanwhile the government in India, which like China is considered a global growth leader, abandoned its traditional fiscal caution and approved a sharp increase in budget spending in a bid to beat the crisis.

“Extraordinary economic circumstances merit extraordinary measures,” Mukherjee told a session of parliament.

“Employment generation schemes have to be expanded and social security nets have to be strengthened to protect the vulnerable sections of our society.”

In Europe, Ukraine suffered a fresh blow on Monday when international ratings agency Standard and Poor’s warned of a possible credit rating downgrade as the ex-Soviet republic struggled to get International Monetary Fund credit.

And Russia disclosed that its industrial production plunged by 16.0 percent in January compared with January 2008. Russian officials have already warned that the economy will record a contraction in 2009.

There was more fallout from the crisis in Japan where hundreds of laid-off temporary workers protested and in Britain where German automaker BMW said it would shed 850 workers at a plant in England who help make the Mini car.

BMW said nearly a fifth of workers at its plant in Cowley, near London, would be affected by the downsizing starting on March 2 to coincide with a reduction in the working week to five days from seven.

“While Mini has been weathering the economic downturn, it is not immune from the challenges of the current situation,” BMW said in a statement.

A trade union official said Dutch truckmaker DAF will slash its workforce in half at its Westerlo factory in northern Belgium, cutting 873 jobs.

In the United States, where financial markets were closed for a public holiday, President Barack Obama was preparing to sign a new massive economic stimulus plan on Tuesday.

Obama has said his 787-billion-dollar stimulus package, combining public works spending and tax cuts, is the only alternative to catastrophe.

Analysts also expected the US administration to announce a new plan to ease home foreclosures and to offer further details about a bank rescue plan announced last week.

An administration official said Obama is to set up a task force to steer the restructuring of the crippled US auto industry instead of relying on just one “car czar.”

As two giant automakers prepare to unveil painful recovery plans to the government on Tuesday, the official said the task force would be headed by Treasury Secretary Timothy Geithner and White House economic advisor Lawrence Summers.

- AFP /ls

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The Financial Times quoted Porsche chief financial officer Holger Haerter as saying that the company had gained 392 million euros in its 2007/2008 fiscal year from trading in options on German stocks, in addition to controversial gains from trades in VW shares.

“We have also arranged share options to generate liquidity. The underlying shares were referring to DAX (Frankfurt blue-chip index) companies and not to Volkswagen,” the FT quoted Haerter as telling an annual general meeting.

Trades in VW share options earned 6.8 billion euros for Porsche in its last fiscal year, while it made around 1.0 billion from sales of its luxury sports cars.

A Porsche spokesman contacted by AFP was not able to comment immediately on the report.

Hedge funds filed complaints against Porsche at several German courts after it sparked a surge in VW’s share price when it disclosed that it controlled, through direct holdings and options, 74 percent of the shares in VW, much more than previously believed.

The funds had bet on a fall in the share price and have alleged that Porsche’s trading activities ran counter to the company’s statutes, the FT said.

Porsche chief executive Wendelin Wiedeking said the company used only VW derivatives to protect against a rise in the share price and stressed that “we are not speculators.”

But the revelation of further trades in other DAX shares made Porsche indeed look like a speculator, the newspaper quoted analysts as saying.

– AFP/ir

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In a statement, BMW said contracted agency workers on the weekend shift would be affected by the 19 per cent downsizing that will come into force on March 2 when the plant begins operating five days a week instead of seven.

“While Mini has been weathering the economic downturn, it is not immune from the challenges of the current situation,” it said.

“Against this backdrop the company felt that a review of its shift patterns was necessary,” it said, adding: “This decision has not been taken lightly.”

BMW, which is struggling in its key North American market, previously said that its overall 2008 vehicle sales were down five per cent from the year before.

Sales of the Mini — which celebrates its 50th anniversary in August — were down by 35 per cent in January.

As a result, BMW had already decided to halt production of Minis at Cowley, near London, from Monday for one week. Ahead of the downsizing, Cowley employs about 4,500 workers.

Last week, German-owned luxury car brand Bentley said it would axe 220 jobs and temporarily cut pay for retained staff by a tenth as it battles sliding sales.

Meanwhile Jaguar and Nissan have announced major job cuts in Britain in recent weeks, while Honda is closing its factory in Swindon, western England, for four months.

In January, the government unveiled a 2.3-billion-pound (3.3-billion-dollar, 2.6-billion-euro) support package for Britain’s ailing auto industry.

Sales of new cars in Britain tumbled by more than 30 per cent in January as the recession slashed demand for new vehicles, trade data has showed.

– AFP/ir

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