Toyota slashes vehicle output

“We expect the severe conditions to continue this year,” she said.

Toyota, which has been hit hard by falling demand in its key European and North American markets, has already said it expects the current fiscal year through March 2010 to be its worst-ever financially.

On Monday Toyota shares fell 5 per cent after it forecast a much bigger-than-expected annual loss of $8.6bn.

The global financial crisis has hammered demand for cars around the world, pushing Toyota’s US rival Chrysler into bankruptcy and forcing many other car companies to slash output and jobs.