It was a fourth straight monthly drop in sales, excluding mini-vehicles, according to the Japan Automobile Dealers Association.

The group warned that 2008 could be the worst year in more than three decades for Japanese auto sales.

'Since the shock of (the collapse of Wall Street banking giant) Lehman Brothers, consumer sentiment has deteriorated,' an association spokesman said.

'It's not only a problem with the industry but the entire economy,' the spokesman said. 'We are afraid that sales in 2008 could be the lowest in nearly 35 years as an immediate recovery is now unlikely.'

The global slowdown has badly shaken Japan's automakers, which in recent years have cashed in on worldwide demand for their cars. -- AFP