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Toyota to halve Japan production, putting jobs at risk

Annual output edges closer to the 'red line' of 3m vehicles

Production cuts by Toyota are feared to deal a severe blow to Japan's auto industry. (Photo by Koji Uema)

NAGOYA, Japan -- Toyota Motor will cut next month's domestic automobile production by roughly half from its March-end plan, Nikkei learned Wednesday, as the spread of the novel coronavirus depresses demand for new cars around the world.

The automaker had been finalizing the number after indicating earlier that it will reduce output at all 18 assembly plants in Japan, including those of group companies.

"The lack of prospects for recovery in the North American market is a major reason behind the domestic production cut," said a source at Toyota.

With the company poised to slash production in June by about 40%, Toyota may find difficulty keeping annual domestic output of at least 3 million vehicles, which it sees as the minimum for maintaining its manufacturing capabilities and jobs. This in turn is certain to exert pain on parts suppliers.

Toyota shut down seven production lines at five domestic plants in the first half of April, which is expected to result in 20% lower output for the month compared with the March plan. The automaker's expanded production cuts are seen applying mainly to models intended for overseas markets.

Toyota conducted broad production cuts when global demand shrank due to the 2008 financial crisis, slashing monthly output by more than 60%.

Toyota produced about 3.41 million vehicles in Japan last year, of which roughly 2.1 million were exported. Shipments to North America totaled 850,000, followed by 390,000 to Asia and 290,000 to Europe.

A plan drawn up at the beginning of the year called for production of about 3.24 million vehicles in Japan in 2020.

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