BMW, the world's largest premium carmaker, plans to cut 2,500 permanent staff in Germany and 8,100 jobs in total in a move that will cost the company hundreds of millions of euros.

The reductions are intended to generate annual savings of 500 million euros (£377 million) starting in 2009.

But if the euro continued to stay above $1.50, BMW would need to cut labour costs even further, group personnel director Ernst Baumann said.

The job cuts in Germany, a key part of a plan to reduce BMW's initially budgeted costs by 6 billion euros (£4.5 billion) by 2012, are a dramatic reversal of form for a company that has avoided such measures in the past.

BMW, which in the UK has the Mini factory at Oxford and the Hams Hall engine plant at Coleshill, said the cuts in Germany would be the bulk of the planned reduction of 3,100 permanent staff worldwide.

Several hundred have already signed up for voluntary redundancy packages necessary since BMW has a labour agreement preventing it from laying off German employees until the end of 2013.

Another 5,000 temporary jobs in Germany are being axed, of which half were eliminated in the fourth quarter of last year, and BMW expects to have just 3,200 temps still working in Germany by the end of this year.

In a separate development yesterday, Toyota will build 11.3 million of its own-brand vehicles a year by 2012 - an increase of 30 per cent over 2007 output - according to a report in Tokyo.

The Japanese group, which builds cars for European markets at Burnaston, Derbyshire, and which is set to overtake General Motors as the world's biggest carmaker by volume, will expand on the strength of growth in Russia, China and other emerging markets. Annual output, excluding those of affiliates Daihatsu and Hino, will continue to increase by 600,000 vehicles a year, it was claimed.

If the goal is met, global output will have doubled over ten years from 5.63 million vehicles in 2002.

Toyota declined to confirm or deny the report. "We are always considering what the most appropriate production is. But nothing concrete has been decided," a spokesman said.