In a bid to return to profitability by the 2010 fiscal year, Toyota will reportedly slash its global production capacity by 10 percent. Toyota will make the capacity cuts in the United State, United Kingdom and Japan, resulting in a 1 million unit capacity decrease.
Toyota currently has a global production capacity surplus, leading to several underutilized plants. Toyota’s factories typically need to operate at about 70 percent capacity in order to break even, meaning anything under that is actually losing the Japanese automaker money.
Toyota ’s New United Motor Manufacturing Inc. factory – a former joint-venture plant with General Motors – will be the first plant to shut down under the plan, followed by facilities in the UK and Japan, according to Japan’s Nikkei business daily.
Earlier this year Toyota improved its yearly financial forecast and hopes to turn an operating profit by the 2010 fiscal year.
