Tony O'Kane | Jan 21, 2009

As inventories of unsold vehicles build up everywhere and new car sales decline month-on-month, Toyota Motor Corporation has reportedly decided to halve the output of its Japanese factories over the coming months.

The Asahi Shimbun reports that factory stoppages will occur over an 11-day period sometime between February and the end of March, while the Kyodo newsagency says that 11 out of Toyota's 12 Japanese factories will be affected by the halt.

The news comes just days after Toyota announced similar production interruptions at its North American plants, while Toyota Australia recently confirmed that local production of the Camry and Aurion will also be scaled back.

The production cuts - combined with swelling inventories and the news that the company may record its first loss in 71 years - don't paint a pretty picture for ToMoCo. But while it is struggling to retain sales and profitability in the current market, its immense capital resources will ensure that it can ride out the current downturn better than most, albeit with a severely dented bottom line.

Toyota will certainly be able to weather the storm. What remains to be seen is just how much it'll have to throw out the window to keep the red ink off the books.

Will Toyota suspend even more of its manufacturing operations in the near future? If things continue the way they're going, expect more of the automotive giants to be adjusting output and 'battening down the hatches'.

[Reuters]

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