Honda said global production rose 0.5% from a year earlier to 1.18 million vehicles, as the company experienced strong demand for its vehicles in the US and for minivehicles in Japan. Nissan's production fell 13% to 1.15 million units in the first six months of 1999.

Amid the robust demand for its vehicles in the US, Honda plans to build a $ 400 million factory in Alabama to produce minivans or sport-utility vehicles beginning in 2002. Nissan, meanwhile, faces sluggish sales abroad, and the lack of minivehicles in its model lineup has hurt sales in Japan.

Toyota Motor Corp. kept its No.1 position among Japanese auto makers, producing 2.34 million units globally from January through June, unchanged from a year earlier. Domestic production at Japan's five leading auto makers fell in the first six months of 1999. The companiesattributed the decline to a drop in exports and weak consumer demand for big-ticket items amid the country's sluggish economy. Toyota's first-half domestic output fell 6.1% to 1.53 million units, Nissan's decreased 11.2% to 688,800, Honda's declined 7.5% to 582,974, Mitsubishi Motors Corp.'s eased 3.5% to 519,302 and Mazda Motor Corp.'s retreated 8.1% to 389,211.

Analysts said an expected recovery in the Japanese economy could boost domestic auto sales in the year's second half. But a further decline in exports is likely to keep overall auto production virtually unchanged from 1998, analysts added. "The export circumstances are getting worse, especially in the Middle East and South America," said Mashu Kato, an analyst at NLI Research Institute. Lower crude-oil prices are hurting exports to the Middle East, while the global financial crisis is hampering shipments to Latin America. Kato expects domestic auto production in Japan to fall to 9.9 million units this year from 10.1 million units in 1998. Analystssaid minicar production is unlikely to keep pace with last year, when strong demand greeted new minivehicle models that were built to revised safety standards. The production decline is likely to hurt profits at Japanese auto makers, said Takashi Oshika, the research director at Mitsubishi Research Institute.

Oshika predicts parent operating profit at Japan's 11 auto makers will fall to a total of 800 billion yen ($6.72 billion) in the fiscal year ending March 31, 2000, from 900 billion yen a year earlier.

In the first six months of 1999, Toyota's domestic sales declined 2.5% to 871,127 units, while the company's exports eased 2.1% to 726,483. Toyota held a domestic market share of 42% in the first half of the year, excluding minivehicles. Overseas production rose 13.9% to 810,424 units, helped by expanding output in North America and the United Kingdom.