Nov. 19 (Bloomberg) -- Toyota Motor Corp. will further trim North American production and Nissan Motor Co. said second-half profit will fall to ``zero'' as a recession pushes U.S. vehicle sales to the lowest annual tally in 15 years.

Toyota, heading for its first drop in U.S. sales in 13 years, will extend the Christmas-New Year closure at its U.S. and Canadian plants by two days and make other cuts, spokesman Mike Goss said in an interview yesterday. Nissan Chief Executive Officer Carlos Ghosn made the profit forecast in a Wall Street Journal interview, confirmed by company spokesman Simon Sproule.

Nissan and Toyota have cut their annual profit forecasts by more than 50 percent because of the yearlong industrywide slump in the U.S., the world's largest auto market, and waning demand in Japan and Europe. The value of overseas sales is also being eroded by the yen's 16 percent gain against the dollar and 34 percent rise against the euro this year.

For Nissan, ``there's a possibility of a loss in the second half, depending on what happens with the currency and sales,'' said Koji Endo, a Tokyo-based analyst at Credit Suisse Securities (Japan) Ltd., who rates the company ``underperform.''

Last month, Nissan forecast second-half net income of 33.7 billion yen ($348 million) and operating profit of 78.4 billion yen. The company expects full-year net income of 160 billion yen, a 67 percent drop from the year earlier.

``We are working toward meeting the profit target'' given on Oct. 31, Chief Operating Officer Toshiyuki Shiga told reporters today in Tokyo.

Nissan dropped 2.8 percent to 346 yen at the close of trading in Tokyo. Toyota was unchanged at 3,050 yen.

Production Cuts

Toyota's production cuts also include reducing Sienna minivan output in Indiana by half in January and slowing one of two Georgetown, Kentucky, factory lines, Goss said. While no full-time employees will be laid off, the company will eliminate ``half or more'' of 500 temporary workers at the Georgetown plant during the first three months of 2009, he added.

Toyota, Japan's biggest carmaker, predicted annual net income of 550 billion yen on Nov. 6, a 67 percent decline from a year ago.

The credit crunch has crippled U.S. vehicle sales, forcing General Motors Corp., Ford Motor Co. and Chrysler LLC to seek a combined $25 billion in U.S. government loans as they burn through cash.

``Depression Level''

U.S. sales are at ``depression level,'' according to David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan, forcing carmakers to offer incentives to lure buyers back into showrooms.

Toyota is offering no-interest loans on more than half its models, including the 2008 4Runner, 2009 Camry and 2009 Corolla. Chrysler LLC promises up to $6,000 cash back on a 2008 300C. GM began its annual ``Red Tag'' sale almost 10 days early this year.

Last week, Toyota said it would indefinitely cut one of two Tacoma pickup production shifts at New United Motor Manufacturing Inc., a joint venture factory in Fremont, California it shares with GM. The automaker built 1.29 million cars and light trucks in North America this year through October, down 7.2 percent from a year earlier.

``Toyota is not profitable in North America this year,'' Sean McAlinden, Center for Automotive Research's chief economist, said yesterday.

To reduce costs and complexity, Toyota is considering options such as making fewer versions of some models, Irv Miller, group vice president of corporate affairs for the company's U.S. sales unit, said at a conference in Los Angeles yesterday.

Nissan based its profit forecast in October on an exchange rate of 103.1 yen to the dollar. The yen has gained 15 percent against the dollar in the past year and traded at 96.78 against the U.S. currency today.

The company abandoned its plan last month for fixed dividends over the next three years. Nissan said it would review its planned payouts to shareholders.

To contact the reporters on this story: Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net; Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

Last Updated: November 19, 2008 01:05 EST