The UK government issued a £2.5 billion lifeline to the country's auto industry as January drew to a close, representing its first backing of a non-financial sector in the recession.

The majority of the figure (£2.3 billion) is made up by loan guarantees which are designed to help major automakers invest in research and development of greener vehicles.

Business Secretary Peter Mandelson said: "There is no blank cheque on offer, no operating subsidies. This [car] industry is not a lame duck and I am not proposing a bail-out."

http://www.ft.com/cms/s/0/238707a2-ec67-11dd-a534-0000779fd2ac.html?nclick_check=1

Honda Motor Corporation announced that it has lowered its annual profit forecasts for an unprecedented fourth time so far this year as demand continues to plummet.

"The sales environment is changing faster than we were able to predict," said the company's Executive Vice President Koichi Kondo.

The news comes after Honda confirmed that it is cutting production by 50,000 units for the year to the end of March, plus a further 370,000 in North America, Europe and Japan.

Meanwhile, Toyota has revealed that its projected losses for the same 12-month period - stated in December as 150 billion yen - could in fact be more than double that figure.

German automaker Porsche has also announced that it expects its first-half operating profit to drop markedly, with a 27.3 per cent drop in sales predicted for the six months to the end of January.

http://uk.reuters.com/article/motoringNews/idUKLNE50T01B20090130?sp=true

US automakers have reported a steep decline in sales to rental car companies and other fleet buyers, which could badly impact overall sales figures, the Associated Press reports.

Fleet vehicles generally account for around 20 per cent of sales across the industry, but the economic landscape means some firms are holding on to their vehicles longer in order to trim costs.

Richard Broome, spokesman for rental car company Hertz Global Holdings Inc, told the news provider: "Our demand is down double-digits. So the need for new cars is less now than it would be in most years."

http://www.google.com/hostednews/ap/article/ALeqM5gVkAR5kB5vVOw63jUzouqdSpcnmAD961NL5O0

Automakers in Japan and South Korea have expressed their concerns over sales volumes in 2009, particularly in light of ever-decreasing demand from the US and Europe.

Official statistics show that production in the former was down by a record 25.2 per cent in December, with new vehicle sales sitting at 3.2 million units - a 6.5 per cent decline and the lowest figure for three decades.

In addition, the Korea Automobile Manufacturers' Association has predicted that the country's export and domestic sales will fall by 5.6 per cent and 8.7 per cent respectively.

Takeshi Fushimi, Director of the Japan Automobile Dealers' Association, told AFP: "It is a very serious situation. In the throes of a kind of economic slump that occurs once in a century, consumers' sentiment has rapidly cooled."

http://www.google.com/hostednews/afp/article/ALeqM5h1Bd2_FqMWToDoOsoIn_z8LFL6Hw

Elsewhere, new figures have revealed that auto sales in India fell by 3.2 per cent in January, representing the sixth decline in the past seven months, Reuters reports.

The Society of Indian Automobile Manufacturers confirmed that a total of 110,212 units were sold during the month, in comparison to the total of 113,894 from 12 months earlier.

Rating agency Fitch noted in its 2009 industry outlook report: "A recovery of the sector remains contingent upon improved credit availability as well as recovery of key demand drivers including gross domestic product growth and the freight markets."

http://uk.reuters.com/article/motoringAutoNews/idUKDEL42714420090209?sp=true

There was more positive news in China, however, where major automakers reported that sales of low-emission vehicles reached record highs in January.

Among the biggest winners were Geely, the country's largest privately-owned car manufacturer, which saw a year-on-year sales leap of 14.5 per cent, while Chery sold over 35,000 units, its highest total since 1997.

The development can largely be attributed to a recent move in Beijing to cut purchase tax on vehicles with engines of up to 1.6 litres from ten per cent to five per cent.

http://www.chinaknowledge.com/Newswires/News_Detail.aspx?type=1&NewsID=20934

Finally, BMW Mini has revealed that it is looking into the possibility of creating a small diesel car for the US market, based on the hugely successful Mini Cooper model.

The vehicle, which would hit the market in 2010 or 2011, would use a new-generation clean diesel engine, mainly in response to stringent emissions regulations in the US.

Company President Jim McDowell told USA Today that although the plans are under consideration, "it's not certain" that they will result in mass production.

http://www.usatoday.com/money/autos/2009-02-09-mini-diesel_N.htm