Mitsubishi Motors will halve production at its Thai plants in the first half of this year as the global financial turmoil takes its toll, a local representative said on Thursday. Manwhile, GM’s rival local unit has asked for government aid.

Mitsubishi laid off 1,100 temporary workers in January and reduced working hours for its 3,700 permanent employees, corporate general manager Takeo Sakurai told Agence France-Presse (AFP).

“Demand in almost all our major export markets dropped nearly 19% last year,” Sakurai said. “It is difficult to foresee the global economic situation. We need to see the demand later and decide what we will have to do next.”

The company last year produced 200,000 cars and pick-up trucks at its two Thai plants in central Chonburi province. Ninety percent of production is for export to Europe, the Middle East, Latin America and Southeast Asia.

In November, General Motors (GM) Thailand said that it would halt assembly for December and most of January and shed 250 staff due to sluggish demand.

The Thai arm of the struggling US automaker is now requesting loans from the Thai government and local banks to help fund a new diesel engine plant in Rayong province, GM said in a statement cited by AFP on Thursday.

The company announced last year that it was investing US$445m in the new factory which was due to start production in 2010.

“Due to the financial crisis … our projects are delayed, notably our diesel engine plant in Rayong,” Steve Carlisle, president of GM’s Southeast Asia operations, said in the statement.

“This calls for alternative funding solutions that will allow us to keep up with the progress we need to make.”

The statement did not say how much the company wanted to borrow, AFP noted.

The Federation Of Thai Industries has forecast that auto exports will fall nearly 25% this year because of the world economic crisis, the report added.