Toyota is cutting production at its British car factory as high fuel prices and the darkening global economic outlook force the Japanese company to rein in its dreams of world domination.

The Burnaston plant in Derbyshire is the first UK car factory to cut production during the present downturn, although others say that they are monitoring the market. With an output of 277,000 cars last year, Burnaston was Britain’s second-biggest car producer after the Nissan plant in Sunderland.

Toyota said that it would reduce the number of daily shifts on the plant’s Auris production line from two to one this year. The company also makes the Avensis at Burnaston, and the production of that model will remain on two shifts but have more stoppage time built into its schedule.

The cut in production, which will result in a reduction of 15,000 vehicles, will last five months while Toyota reviews the market. None of the 3,800 permanent staff will go — they will engage in training and plant maintenance — but some of the 220 temporary workers will leave.

Toyota, which is struggling alongside the rest of the car sector to address sliding markets in North America and Europe, said that it would also cut the number of shifts at its engine plant in Poland. It has already announced plans to cut production in the United States.

Union officials welcomed what they regarded as Toyota’s cautious approach in the UK. Tom Sawyer, a regional officer for Unite, said: “The global economic downturn is presenting car manufacturing with tough challenges. Toyota’s response has been to take a longer-term view of the market and make adjustments now to position it for future recovery.”

Pointing to continuing declines in the US, the Japanese giant lowered its annual vehicle sales forecast for next year to 9.7 million — a modest rise of 2.1 per cent above current year forecasts — abandoning, for now, its ambition of becoming the world’s first manufacturer to sell more than 10 million cars in a year.

Katsuaki Watanabe, the president of Toyota, said: “The business environment is rapidly becoming more difficult. Things remain very uncertain, not just in the US but in emerging countries and resource-rich nations as well. We cannot be optimistic now.”

The British car industry will be watching sales closely next month in the hope that the new registration plate will bring a boost. If more car companies reduce production, cuts will quickly hit the sprawling components businesses. A spokesman for Vauxhall, which makes cars at Ellesmere Port, Merseyside, said: “We are holding on at the moment and have no changes planned, but we are watching the market.”

A Japanese analyst said that although Toyota appeared to be making reasonable assumptions about the US and European markets, there were still risks. “This new forecast may be achievable,” he said, “but it certainly puts a lot of faith in the company’s sales performance in emerging markets. If those start to falter in the way some economists are predicting, Toyota is going to have to cut again later in the year.”

The company appeared to acknowledge the risks of betting on India, China and South America. Its latest forecast assumes that the North American market will not grow this year or next. This comes despite the company’s continuing commitment to a substantial increase in production of the Prius and other hybrid models.

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