Toyota is to cut its Japanese production capacity by more than 10 per cent by 2014 but won't lay off workers, according to reports.
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The Nikkei reports Toyota will continue to reduce its domestic output into the future, dropping production from current levels to about 3.1 million vehicles per year. Toyota is aiming to maintain domestic production levels at around three million units annually, or about 500,000 units less than its current levels, despite the risk of a strong yen potentially hurting export profitability, the Japanese publication said.

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.

The cuts do not require workers to be laid off as Toyota aims to ensure its domestic suppliers and partners continue to remain profitable.

While the cuts impact on domestic production, overseas output is expected to increase with Automotive News reporting Toyota plans to build 8.65 million vehicles globally in 2012 with 5.25 million being produced abroad. This joins calls for a rise in overseas production to about 6.8 million units by 2015 that would bring the brand’s global total to 10 million vehicles per year.

Toyota's Japanese production capacity before the global financial crisis was about 3.9 million, according to the Nikkei.