TOKYO — Japanese automaker Honda slashed its profit forecast for the fiscal year and said managers will take a 10 percent pay cut amid a global downturn in the auto industry.

President Takeo Fukui blamed the lower earnings forecast on declining demand set off by the U.S. financial crisis and the nose-diving dollar, which recently fell to a 13-year low against the yen.

Japan's second-biggest automaker said Wednesday it expects $2.06 billion in group net profit for the fiscal year, which will end March 31 — less than a third of the 600 billion yen earned last fiscal year.

Tokyo-based Honda has already twice cut its forecast for the current year.

He said Honda's worldwide vehicle sales in 2008 are expected to reach 3.77 million units, almost unchanged from 2007. Sales are plunging in the U.S. and other regions, with even fast-growing emerging markets getting battered in recent months, according to Honda.

Underlining the tough times ahead, Fukui refused to set a vehicles sales target for 2009 — an unusual move for Honda.

To take responsibility for the faltering results, Honda directors will take a 10 percent pay cut and further bonus reductions are likely, he said.

Adding to the dire outlook for automakers, Nissan said Wednesday it would reduce production and cut workers.