Honda Malaysia President Azman Idris said the company hopes to sell 35,000 cars this year in South-east Asia's largest passenger car market, up about 8 per cent from 32,477 units in 2008.

Despite a sharp drop in overall sales in the domestic market in January, Honda managed to increase Malaysian sales to capture a 10 per cent market share - more than its 7 per cent market share for 2008, he said.

Unlike Honda factories globally which had cut production, output at its Malaysian factory has been ramped up as demand for its four main models - the City, Civic, Accord and the CRV - remained robust, he said.

The mid-sized sedan City remains its best-selling model, accounting for half of its sales.

'Our sales are still strong as banks are still giving credit but we anticipate tough times. Customer satisfaction is the way forward for us to retain customer loyalty,' he said after the launch of a new version of the Civic.

The Malaysian Automotive Association forecast domestic sales to drop 12.4 percent to 480,000 units this year from 548,115 units last year.

But Mr Azman said Honda is more conservative and estimated total industry sales at only 400,00 units as the Malaysian economy faces its first possible recession in a decade.

Honda is the second best selling foreign brand in Malaysia, trailing rival Toyota.

Honda's biggest production hub in South-east Asia is in Thailand, which makes a wider range of cars for exports largely to the region and Australia. But production there has been cut by half to 120,000 units last year and will remain at the same level this year, officials said. -- AP