Toyota mulls 40 pct cut in capex next year

TOKYO, Dec 8 - Toyota Motor Corp is considering cutting its capital spending for the business year starting next April next by 30-40 percent from this year in response to a sharp downturn in auto sales, the Nikkan Kogyo newspaper reported on Monday.

Toyota and rival automakers are slashing their vehicle output as the industry has been hit by a global sales slump, with November sales in the United States, the world's largest market, plunging to the lowest level since 1982.

Toyota, the world's biggest carmaker, plans to freeze most investments earmarked for boosting production capacity, and to cut spending on ongoing projects, while focusing investments in growth areas such as hybrid cars, the paper said.

A Toyota spokeswoman said the firm is reviewing all of its capital spending plans with the aim of reducing next year's investments, but had not decided the scale of reduction.

The company has planned capital expenditure of 1.4 trillion yen ($15.1 billion) for the current business year to March 2009, down 5 percent from last year, and its sharp spending reduction is likely to have a large impact on its suppliers.

Toyota said last month it had set up an emergency committee, chaired by President Katsuaki Watanabe, aimed at boosting profitability over the next few months to avoid lowering its profit forecasts again. It slashed its annual operating profit forecast last month by 1 trillion yen, to 600 billion yen.

The company has said possible steps include cutting back labour and development spending, as well as delaying new factory launches. ($1=92.82 Yen)