August 25, 2009 / 6:07 PM / 10 years ago

Toyota to cut global capacity by 1 million vehicles: report

An employee polishes Toyota Motor's cars at its dealers shop in Yokohama, south of Tokyo August 4, 2009. REUTERS/Toru Hanai

(Reuters) - Toyota Motor Corp (7203.T), the world’s biggest automaker, will cut its global production capacity by 10 percent, or 1 million vehicles, the Nikkei business daily reported.

The production cut will come as early as this fiscal year to raise utilization at underused plants, the paper said.

The automaker plans to initiate the cuts by first shutting down New United Motor Manufacturing Inc (NUMMI), a joint venture with General Motors Co GM.UL, and halting production lines at plants in Japan and the U.K., the Nikkei said.

Toyota will slash its production capacity to 9 million, in a bid to raise the operation level at its plants above the break-even point of 70 percent and return to operating profit in fiscal 2010, the paper said.

Earlier this month, Toyota forecast a slightly shallower annual loss, relying on deeper cost cuts and a government-backed sales boost, underscoring doubts over a sustainable recovery in demand.

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Reporting by Shradhha Sharma in Bangalore; Editing by Ratul Ray Chaudhuri

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