Toyota to halt production in Japan for 11 days

Toyota will halt production at its Japanese plants for 11 days in February and March after a sharp fall in US sales.

The Japanese giant suffered a 37 per cent slump in December US sales, the company's worst performance in its biggest market for more than a quarter of a century, and bigger than the sales declines at struggling US rivals General Motors and Ford.

Toyota had already announced a three-day production halt for this month at its 12 directly operated Japanese plants. A wholesale suspension of domestic production is almost unprecedented for Toyota, which halted output for one day in 1993 because the strong yen had hit sales.

Automakers around the world are cutting production as consumers, hit by tight credit and the economic downturn, shun big purchases despite companies' desperate efforts to lure them with cut-price offers.

Toyota warned two weeks ago it would suffer its first annual operating loss, blaming a slump in sales and the strong yen, and said it would adjust production as necessary beyond January.

"I never expected the crisis to spread this fast and leave this deep a scar," Toyota's president, Katsuaki Watanabe, said. "I'd like to believe that [the US economy will] hit bottom some time this year," he added. "But if you look at the automobile market now, it's very, very tough. We need to proceed with the assumption that this situation could continue."

Japanese-built cars make up about 40 per cent of Toyota's sales in the US, where foreign-made cars and trucks have been sitting unsold in dealers' yards and gathering dust at ports. Analysts say the outlook for the global car industry remains tough.

Toyota overtook GM last year to become the world's biggest carmaker. The four Japanese assembly plants built an average 130,000 vehicles in total a month last year. Toyota plans to turn the 11 days in February and March into paid company holiday.