By Nick Aziz
Wednesday, Dec 17th, 2008 @ 5:49 am
 

Honda CEO Takeo Fukui on Wednesday said his company has been forced to cancel the next-generation Acura NSX sports car due to poor economic conditions. The news came during a speech about the automaker's revised financial forecast. Plans to bring the Acura brand to Japan have also been shelved permanently, the Nikkei news service has reported.



"The situation is worsening by the day, and there is no prospect for recovery, is our understanding," Fukui told reporters.

The NSX was a much-anticipated V10-powered sports car in the late stages of development. Designed as a successor to the original model of the same name, the new NSX was slated to be launched as a 2010 model. The project was subject to multiple delays related to the vehicle's exterior design, but those problems were recently overcome.

Fukui previously characterized the new NSX as "necessary for Honda."

The company indicated its operating profits will be 180 billion yen ($2 billion), down 67 percent from the forecasted 550 billion yen. There's even a chance, according to Reuters, the automaker will report a half-year operating loss -- for the latter part of 2008. If that happens, it will be the the first time in at least 11 years. Also hurting the income forecast is the yen's strength against the U.S. dollar, which further compounds the U.S. sales problem.

The debut of the Acura brand -- originally U.S.-only -- in Japan was originally planned for late 2008, but was recently delayed until 2010. Given the economic downturn, Honda said it decided to cancel the costly program all together.

Honda also announced it will cut production by 314,000 vehicles worldwide for the current fiscal year, according to Bloomberg. It also will eliminate about 1,200 temporary jobs in Japan.