UPDATE 2-Honda to cut Japan output 4 pct after subsidies end

+ Honda to cut October Japan production 4 pct vs July-Sept

+ Oct Japan production level would be up 24 pct y/yr

+ Toyota October Japan output seen down 20 pct -media (Adds Toyota, details, dateline)

TOKYO, Aug 10 (Reuters) - Honda Motor Co plans to reduce its Japanese car production by 4 percent in October compared with the July-September quarter, in what would represent a small impact from the end of government subsidies to stimulate demand.

Japanese auto executives have said they expect a double-digit decline in domestic car sales after subsidies to replace cars 13 years and older expire at the end of September.

Domestic media have reported that Toyota Motor Corp told its suppliers that daily production in Japan could fall by around 20 percent from October from current levels. Toyota has benefited the most from the government's stimulus measures because they favour next-generation vehicles such as hybrids -- a segment which it dominates with the top-selling Prius.

A Honda spokeswoman confirmed a Nikkei business daily report on Tuesday that the automaker would scale back production at its Saitama factory to 1,800 units a day in October from the current 1,950 units.

That would still be up 24 percent from year-ago levels, which were depressed from weak exports in the aftermath of the financial crisis.

Output at its other major plant, the Suzuka factory, would remain the same, meaning overall domestic output would fall just 4 percent, the spokeswoman said, confirming the move was in line with Honda's financial plans revised in late July.

The Japanese government's subsidies, due to expire on Sept. 30, and a separate scheme offering tax incentives on purchases of cleaner vehicles, have shored up sales in the shrinking Japanese car market over tha past year. The tax incentives will run until March 2012. (Reporting by Himank Sharma in BANGALORE and Nobuhiro Kubo, James Topham and Chang-Ran Kim in TOKYO; Editing by Michael Watson)

REUTERS