Japan’s mighty automotive industry, which comprises at least ten big manufacturers, could soon be reduced to a Detroit-style Big Three.

According to Osamu Suzuki, president of Suzuki Motors, there is no truth to the idea that Japanese carmakers enjoy any immunity to the crisis affecting the industry worldwide and the downturn that has pushed General Motors, Chrysler and Ford to the brink of oblivion will also shake their Japanese counterparts.

The turmoil, he said, would lead Japan into a period of consolidation that is viewed by many investors as long overdue. The tally of ten large carmakers, including Mazda, Fuji Heavy [Subaru], Mitsubishi Motors and Isuzu, could quickly be reduced in the stampede for cost-cutting and survival.

Given that Suzuki is far smaller than Nissan, Honda and Toyota, brokers in Tokyo said that, on one reading of the president’s comments, it could appear that the Shizuoka-based company was effectively putting itself up for sale.

The fallout from a strong yen and slumping sales in the United States, Europe and Asia is already being felt. Last week Toyota, the largest of the Japanese carmakers, predicted that fiscal 2008 would end in the company’s first full-year loss since the 1940s, while Honda stunned investors with its own earnings downgrade and a symbolically recessionary withdrawal from the glamour of Formula One motor racing.

Mr Suzuki said that even after the unprecedented global sales collapse over the past few months, the worst was still to come. “There is a time-lag between what is happening with the Big Three US carmakers and the impact that will have in Japan. It is as if tsunami waves are rolling toward Japanese shores. I believe a real wave will hit us around July or August next year, with car sales hitting rock bottom.”

He went on to say that the world was “entering a period in which more than ten Japanese carmakers could be consolidated into a Japan Big Three.”

His comments have triggered intense market speculation about the shape and constituents of the consortiums that might emerge. Some loose alliances, such as Toyota’s stake in Hino and Fuji Heavy, exist already and may form the core of the new giants. Many assume that Toyota, Honda and Nissan would take the lead in proposing any tie-ups, focusing their attention on areas of overlap in technology, geography or shared parts suppliers. Honda and Suzuki, for example, are makers of both cars and motorcycles and are based in the same city.

The sheer speed of the slump has caught many analysts off-guard. Last week Kota Yuzawa, of Goldman Sachs, revisited his forecasts only a week after publishing a report. “Our worst case has now become our best case,” he said, adding that the most pessimistic reading of the situation had become realistic.

Toyota could rack up operating losses of 550 billion yen (£4.2 billion) in the coming financial year, while Nissan could suffer losses of Y300 billion, he said.

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