Toyota Motor Corp.'s domestic year-on-year output declined by 31.2 percent in June. In the same period Nissan Motor Corp. dropped by 34.2 percent, while Honda Motor Corp. by 30.6 percent.

Statistics have shown exports for all of Japan's automakers dropped by more than 50 percent in the past two fiscal quarters.

Meanwhile, the sales of Toyota, the world's largest carmaker, dropped by 26 percent for the January-June period to around 3,564,000 units.

Both Toyota Motor and Nissan Motor unveiled updated strategies to secure footholds on future automobile markets amid record sales dips in production, by focusing on expansion into China and designing more environmentally friendly automobiles.

Toyota is in discussion with Mazda Motor about sharing hybrid technology that may boost Toyota's position as the industry standard for eco-cars. Ford Motors and Nissan have already have arrangements with Toyota to employ the company's hybrid-car technology.

Toyota's president, Akio Toyoda, said the company will try to bolster sales in developing markets such as China, while cutting loses in America with initiatives including closing a factory in California.

Nissan Motor Co. and China's Dongfeng Motor Co. will strategically expand production capacity in China, at a cost of 5 billion yuan (652 million U.S. dollars), according to Bloomberg News Wednesday.

Meanwhile, Nissan announced details this week of its zero-emission lithium ion electric car, set for launch in 2010. According to the company, this automobile seats five people, can travel at speeds up to 140 km per hour, and can traverse about 160kilometers on a single charge.

To increase the maximum distance Nissan's zero-emission electric car can go without refueling, the new model will feature a breaking system that recharges an energy-efficient battery coupled with a light frame. Specifics about the price in yen, yuan, or dollars have not yet been released.

According to reports by JP Morgan Securities, by 2020 the hybrid automobile market will expand by approximately 10 times and account for 11.28 million units.