Honda aims to lower Japan cost structure

* Aims to be profitable in Japan at 70 pct utilisation - CFO

* Fit subcompact production in N.America doesn't make sense

* To reduce number of Japan-only models for efficiency

* U.S. used car prices stable

By Chang-Ran Kim and Yoshifumi Takemoto

TOKYO, Nov 4 (Reuters) - Honda Motor Co (7267.T: Quote, Profile, Research) aims to improve its cost structure to be able to break even in Japan using just 70 percent of its capacity to build cars, a top official at Japan's second-biggest automaker said on Wednesday.

Honda last week nearly tripled its annual operating profit forecast to 190 billion yen ($2.1 billion), far above consensus projections and despite lowering its dollar rate assumption to a tougher 85 yen for the second half from 90 yen. [nT324227]

Its Japanese operations are expected to stay in the red, but Chief Financial Officer Yoichi Hojo said Honda was shaving costs on internally developed components and looking for cheaper sources of parts around the world with the aim of erasing the losses even at the current depressed level of production.