Japanese automakers such as Honda and Nissan want to reduce their reliance on the U.S. market, where weak demand and a falling dollar have slashed profits, even as a poor turnout at their flagship auto show highlights the challenges at home.

No major overseas brands made it to this year's Tokyo Motor Show which kicked off on Wednesday, while floor space and the number of world premiere car models is half that of the previous show two year ago.

Japan's car lobby forecasts its new vehicle sales to sink to a 32-year low this financial year as the economic slump exacerbates demand already declining due to a shrinking population, despite efforts by executives to talk the market up.

A lot of people say a lot of things about the Japanese market, but it's still a 5-million-unit market -- No. 3 in the world after China and the United States, said Nissan Motor Co <7201.T> Chief Operating Officer Toshiyuki Shiga.

We need to keep doing our part in drumming up interest here, he said of the motor show, traditionally considered one of the industry's five big international shows.

But with the U.S. market sinking back down in September after a temporary boost from the cash-for-clunkers scheme, and a strong yen eating into repatriated profits, automakers such as Honda Motor Co <7267.T> and Nissan Motor Co <7201.T> are having to looking elsewhere for sales.

It will be hard to export to North America if the dollar falls further against the yen, Honda Chief Executive Takanobu Ito told Reuters Television in an interview.

We will need to find export markets other than North America to keep our domestic output levels.

Nissan Chief Executive Carlos Ghosn told reporters that Nissan may replace shipments of Japan-made cars to dollar countries such as in the Middle East with cars manufactured in the United States, due to the dollar's weakness against the yen.

Toyota Motor Co <7203.T> Executive Vice President Takeshi Uchiyamada also said the strength in the yen was worrying.

If the yen continues at this level, shifting some production out of Japan would be something we'd need to look at, he told a small group of reporters.

The dollar was trading around 90.60 yen on Wednesday, having earlier this month fallen near its January low of 87.10 yen, which was the lowest since 1995.

The U.S. market is the largest for all three of Japan's biggest automakers.


Despite the Japanese car market's woes, reduced taxes on hybrids and other less-polluting cars have helped stem some of the sales slide -- and prompted automakers to ramp up their drive into cleaner vehicles to boost growth.

Nissan, which plans to mass-market electric vehicles in 2012, confirmed for the first time that it would add an all-electric version of the NV200 light commercial vehicle (LCV), a sketch of which was unveiled at its booth.

CEO Ghosn also spoke of new opportunities in the electric car field, after Nissan and trading house Sumitomo Corp <8053.T> announced on Tuesday plans to form a joint venture to recycle lithium-ion batteries after they are used in Nissan cars.

A second life for batteries exists as a power backup, emergency power supply or home storage unit for electric or solar energy, Ghosn told a news conference.

Toyota, known for its popular Prius gasoline-electric hybrid and miles ahead of competitors in the fast-growing field, is also ramping up efforts in developing electric cars.

Hybrid vehicles are becoming mainstream, but Toyota is not putting all of its eggs into this core technology, Toyota President Akio Toyoda told a news conference, introducing a range of cars including the FT-EV II electric car concept, and a new, compact five-door Lexus hybrid concept, the LF-Ch.

Toyota's Uchiyamada said 30 percent of its new cars sold worldwide could be hybrids by 2020.

But the world's biggest automaker also unveiled the Lexus LFA two-seater supercar powered by a 4.8-liter V10 gasoline engine, achieving a maximum speed of 325 km per hour (200 miles per hour) and acceleration from 0 to 100 kilometers kph (60 mph) in 3.7 seconds.

Honda unveiled a close-to-production version of the CR-Z concept -- a six-speed manual transmission sporty hybrid car that is due to go on sale in February. It also showed a concept electric car, the EV-N, which it said was suitable for short-distance driving.


(Additional reporting by Kei Okamura, Yumiko Nishitani and Yoshifumi Takemoto; Editing by Chris Gallagher and Lincoln Feast)