Toyota Will Cut Domestic Production as Sales Plummet

By Tetsuya Komatsu and Makiko Kitamura
Aug. 26 (Bloomberg)

Toyota Motor Corp., Japan’s biggest automaker, plans its first long-term closure of a domestic assembly line as car sales in the country fall to the lowest in more than 30 years.
Toyota, which cut domestic production 49 percent through June, will reduce output by about 220,000 vehicles by shutting down a line at its Takaoka plant from the fiscal first quarter of next year through the second half of calendar year 2011.
Toyota, the world’s largest carmaker, earlier this month forecast a net loss of 450 billion yen ($4.8 billion) for the year ending in March. Toyota President Akio Toyoda, who took the helm in June, is slashing costs as he tries to avoid a third consecutive year of losses.
“Toyota is desperate to cut costs,” said Yuuki Sakurai, chief executive officer of Fukoku Capital Management Inc. in Tokyo. “The company needs to stop building unpopular and unprofitable cars.”

Nissan Motor Co., Japan’s third-largest automaker, is also forecasting a second straight loss of 170 billion yen this fiscal year.

Honda Motor Co., Japan’s second-largest, forecasts a 55 billion yen profit, helped by its motorcycle business.

Toyota’s sales in Japan fell 23 percent through July. Honda’s domestic sales declined 12 percent in the same period, and Nissan’s dropped 22 percent.

Japan’s exports fell for a 10th straight month in July as demand from all of the nation’s major markets deteriorated. Shipments tumbled 36.5 percent from a year earlier, steeper than June’s 35.7 percent drop, the Finance Ministry said today in Tokyo.
Toyota also plans to shut a joint-venture factory in California with General Motors Co., according to people familiar with the plan. GM said in June it would end assembly of Pontiac Vibes at the plant, where Toyota builds Corolla compacts and Tacoma pickup trucks.