Honda has said it will delay the start of production at its new car factory being built in Argentina for more than six months until around mid-2010 due to shrinking auto sales.

The Kyodo news agency reported that the carmaker initially planned to start operations in late 2009 with an annual output capacity of 30,000 vehicles, but was forced to put off the plan amid the global economic downturn.

”We decided on the postponement in consideration of recent circumstances in regard to auto sales,” a Honda spokesperson told Kyodo.

The Honda spokesperson said the company is pinning hopes for a recovery in South American markets by mid-2010, emphasizing that long-term growth in auto demand can be expected in the region.

During the delay, Honda will sell cars in Argentina and other South American countries via output from its existing factory in Brazil