Toyota Motor, Japan’s largest carmaker plans to cut its domestic capacity bringing the figure to 3.1 million units as early as 2014, a more than 10% drop from the level projected for this year, Nikkei reports.
The report says Toyota’s overall domestic capacity is expected to fall to about 3.6 million units this year following on from a previous 100,000-unit cut in capacity at its subsidiary’s factory in Shizuoka Prefecture in Japan.
Fortunately, the auto manufacturer said there won’t be any layoffs, and it will make sure that is fellow domestic suppliers and partners won’t lose any of their profits.
The company’s capacity was about 3.9 million vehicles in Japan before the global financial crisis hit, the Nikkei said.
The announcement comes just one day after the Japanese giant said is considering to build a new plant in China’s Tianjin, to catch up with rivals from US, Europe and South Korea in the world’s largest auto market.
Also, in the United States, Lexus dealers put pressure on parent company Toyota to build the new 2013 ES in North America in order to help hedge against a strong Japanese yen.
The ES, which is currently Lexus’ top selling sedan in America, is manufactured in Kyushu, Japan, but since the strong yen made profitability decline, the dealers request the model to be built in North America.
Shares of Toyota closed up $0.04 (o.05%) Tuesday at $76.89.