Japanese firm Honda Motor Co. (HMC) said today it will reduce production starting in January in order to address flagging sales and waning demand. At the automaker's Sayama factory, daily output at 1 of the 2 lines will be slashed from 900 vehicles to 700 vehicles in January. An identical production cut will be carried out for the other line in February.

Sector peers Mitsubishi Motors and Isuzu Motors announced similar plans today to scale back production, as the auto industry battles a particularly unfavorable macroeconomic environment around the globe.

Considering the massive fundamental challenges facing Honda, it's no surprise that pessimism continues to dominate the company's sentiment backdrop. Only 1 out of 4 analysts considers the stock worthy of a "buy" rating, according to Zacks, and option players are feeling equally bearish. The stock's Schaeffer's put/call open interest ratio (SOIR) weighs in at 1.14, just 4 percentage points from an annual peak of skepticism.

Meanwhile, traders on the International Securities Exchange (ISE) have purchased nearly 8 times more puts than calls during the past 10 days. This ratio is higher than 80% of other such readings taken in the past year.

However, in U.S. trading, the American depositary shares of HMC are up more than 4%. In fact, auto stocks are broadly higher across the board today, with the entire group catching a lift after the government granted bank-holding status to GMAC Financial Services, which is partially owned by General Motors (GM).