Toyota is slowing production at its UK and Turkey plants and halting the renewal of some temporary workers’ contractors in the face of weakening European demand.
The world’s biggest automaker, which has a major plant Burnaston in Derbyshire, declined to reveal targets for the production and contract staff reductions.
“In response to demand conditions recently in Europe, we are adjusting our production flexibly through such steps as a change to TAKT time,’’ a company spokeswoman said, referring to the time spent to roll out each vehicle.
Toyota’s Burnaston plant produced 278,000 units of the Avensis mid-sized car, the Auris compact and others last year, while the plant in Turkey made 161,000 units of cars such as the Corolla Verso.
Earlier this week Toyota reported falling sales in North America, Western Europe and Japan, with the firm’s European sales dropping by 32,000 units, to 301,000 units, in its first quarter this year.
The latest move is in line with the company’s announcement on July 28 that it had cut its 2008 production forecasts by 250,000 vehicles to 4.33 million outside Japan and by 200,000 units to 4.10 million units in Japan.
Toyota also cut its 2008 European sales target to 1.19 million units from 1.27 million and its global sales forecast by 350,000 units to 9.5 million vehicles.
Last month, Toyota said it would suspend production of slow-selling big trucks in the United States for three months and implement a major overhaul of its US manufacturing plans to shift to more fuel-efficient cars.
On Thursday, Toyota posted a smaller-than-expected 28 per cent drop in quarterly net profit, impacted by a strong yen and slumping US sales, and kept its forecasts unchanged for what is set to be its most challenging year in recent memory.
Toyota executive vice president Mitsuo Kinoshita said: “The environment surrounding our business has taken a sharp turn for the worse, leading to a very tough first quarter.’’
“It will be crucial for us to act quickly and flexibly to overcome this.’’
Slowing sales in North American, Western European and Japanese markets are compounding the problems of Toyota and some other automakers, who are struggling with a weaker dollar and increases in the price of raw materials.
But Toyota’s slowdown in sales is in contrast with Jaguar’s healthy performance announced in the Society of Motor Manufacturers and Traders’ (SMMT) latest figures.
The luxury marque saw a 30 per cent increase in sales last month compared with July last year and said in the year to date, sales were up almost 14.5 per cent, driven by the popularity of the new XF and XK models.
Jaguar’s stablemate Land Rover did not fare so well, hit by tough comparables with last year’s figures and consumer concerns about fuel costs and emissions.
Sales were down almost 40 per cent in July compared with the same month last year, whereas sales in the year to date have fallen by more than 14 per cent.
The SMMT figures showed a total of 153,420 new cars were registered in July 2008 - a 13 per cent fall on the July 2007 figure.
Toyota’s other rivals have also been having a tough time recently - General Motors last week reported a £8 billion quarterly loss - its third-biggest in over a century - while Ford Motor posted its worst-ever loss of £4.5 billion.
In Europe, BMW and Daimler have warned of lower annual earnings.