Although domestic demand in Japan for Honda cars, has fallen sharply, the country's second-largest automotive manufacturer says it will not alter its global sales projections.

Executive Vice President Koichi Kondo said, "We've suffered a brutal decline so far. A revision is going to be inevitable." For the first nine months of the year, Honda has seen its sales fall 12.3 percent, which translates to 465,000 units sold.

Previous internal projections had hoped for 690,000 vehicles sold by the end of the business year, which concludes on March 31, 2008.

In spite of the domestic decline, however, overseas demand was expected to take up the slack for the company and Honda has big hopes for the second generation of the Fit subcompact set to be released in Japan.

Domestic demand accounts for less than a fifth of the company's overall sales. Kondo said, "Our factories are running at full capacity, and there's plenty of pull from various regions."

Much of the automotive market in Japan has been stifled by the aging population and by the migration of the population to urban areas where public transport negates the need for vehicle ownership.