However, Toyota shares gained 3 per cent in Tokyo, outperforming the overall market.
Automakers are grappled with slumping sales in the mature markets of North America, Europe and Japan as well as slowing sales in emerging markets such as India, China and Russia amid a spreading global recession.
Toyota's announcement followed a newspaper report that rival Nissan Motor Co planned to move production of its March subcompact to Thailand from Japan as part of a structural overhaul to cut costs.
Nissan spokeswoman Yuko Matsuda said she cannot comment on the firm's future product plans. Nissan announced further production cuts in Japan on Thursday and a source said it would post an operating loss this financial year.
Toyota, which has warned it would post its first-ever annual operating loss this fiscal year, said its inventory of North American built vehicles ranged between 80 and 90 days. It hopes to cut that in half in the second quarter of the year.
Toyota just last week said it would halt production at its Japanese plants for 11 days in February and March. "This is a tough environment, and it may continue for a while," Jim Wiseman, vice president of external affairs for Toyota Motor Engineering & Manufacturing North America, said in a statement.
OneIndiaNews (With inputs from Agencies)