Toyota is poised to slash production by as much as 580,000 vehicles – nearly 6 per cent of global capacity – in an effort to stem losses amid the sharp downturn in vehicle sales.

The world's largest carmaker, which is forecasting its second consecutive net loss this year, said it would shut a production line in western Japan from next spring through to the second half of 2011, reducing output by 220,000 vehicles.

The Japanese company is also looking to pull out of Nummi, its manufacturing joint venture with General Motors in California, where it produced 359,000 vehicles last year.

“While nothing has been decided, we are in discussions [with GM's administrator] with a view to pulling out of Nummi,” said a Toyota representative.

Japanese media have been reporting that the carmaker is also looking at cutting production in the UK, where it makes the Auris, along with other lines in Japan.

If this was the case, Toyota would bring the total of production cuts to nearly 1m vehicles, or 10 per cent of its global production capacity.

This is the first time Toyota has planned to cut production on such a large scale and comes as the group's global sales have been battered by the recession.

Toyota is expected to produce about 7.2m vehicles globally this year, compared with 9.7m in 2007, said Masatoshi Nishimoto, analyst at CSM Worldwide, the market research group.

In its home market, Toyota is expected to see production fall to 3.3m vehicles this year compared with 4.9m in 2007, Mr Nishimoto said.