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Report: Toyota's Domestic Output Down 25 Percent

Japan's No. 1 automaker expects to roll out 3 million vehicles at the parent level, 'the minimum necessary' for Toyota to keep its full-time workers, a Japanese newspaper said.

TOKYO (AP) -- Toyota's domestic production in 2009 will likely drop by 25 percent, hit by sinking demand amid a deepening global downturn, a report said Monday.

Japan's No. 1 automaker expects to roll out 3 million vehicles at the parent level -- excluding subsidiaries and affiliates -- down from 4 million units last year, Japan's top-selling newspaper Yomiuri said, citing an unnamed senior official. Output in Japan alone accounts for 50 percent of Toyota's overall production.

The unnamed senior official told the Yomiuri that producing 3 million vehicles is "the minimum necessary" for Toyota to keep its full-time workers.

Toyota Motor Corp. spokesman Keisuke Kirimoto declined to confirm the report. He said the last time Toyota's domestic production slipped below 3 million units was 1979 when its output was 2.99 million.

Hiroshi Watanabe, economist at Daiwa Research Institute, said Toyota's global output will likely plunge in 2009 due to a severe slump in the U.S. and European auto markets.

"Due to the financial crisis and ensuing recession, consumer sentiment in the United States and Europe has cooled down, and we are seeing the same in Japan," Watanabe said.

"People are worried about job losses and falling wages, and buying a car is the last thing on their mind," he said.

The Japanese auto giant has been hammered by the collapse in global demand for cars and expects to suffer its first operating loss in 70 years in the current fiscal year ending March 2009. To weather the global slump, Toyota is slashing the number of temporary workers.

The job cuts so far have not affected Toyota's 316,000 full-time workers worldwide. But Japan's top business daily, the Nikkei, said last week Toyota may cut full-time employees to survive the economic downturn.

The U.S. financial crisis sent auto demand plunging last year in the key North American market. Toyota's global sales fell last year for the first time in 10 years, dropping 4 percent to 8.972 million vehicles.

Paying homage to its roots, Toyota last week tapped Akio Toyoda, grandson of the Japanese automaker's founder, as president.

The U.S.-educated Toyoda, 52, is the first founding family member to take the helm at the Japanese auto giant in 14 years.

He promised a reaffirmation of the company's core principles, such as valuing ideas from the ranks -- a management approach called "kaizen" that has made Toyota's production methods famous in industry circles around the world.

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