Toyota has announced it is to axe production at a plant in California, due to the ongoing economic crisis and reduced demand for cars worldwide.

Japanese motor company Toyota is abandoning a car factory for the first time in its history, as it pulls production at a New United Motor Manufacturing Inc (NUMMI) factory in the US.

Toyota announced yesterday (28 August) that it will stop production at the NUMMI factory in Fremont, California in March 2010.

The news comes after recent tumultuous months for the car maker, including recording an annual loss for the first time in 59 years and suspending production at a plant in Japan for one year.

After the withdrawal from the factory next year, Toyota will move the production to other plants in the US and Japan. The NUMMI plant in Fremont currently manufactures Tacoma pick-up trucks and Corollas.

The factory was previously jointly owned by Toyota and General Motors (GM), but in May this year GM announced it would withdraw from this venture.

Atsushi Niimi, Executive Vice President of Toyota, said: “We have determined that over the mid- to long-term, it just would not be economically viable to continue the production contract at NUMMI.

“This is most unfortunate, and we deeply regret having to take this action.”

Governor of California, Arnold Schwarzenegger, said: “Today is a sad day in the history of Fremont as California joins the ranks of states adversely affected by the bankruptcy of General Motors and the worldwide collapse in demand for automobiles.

“As generations of local NUMMI workers watch this unfortunate news transpire, we continue work already in progress with the U.S. Departments of Labor and Commerce, local government officials, Toyota, GM and the Japanese government to ensure appropriate employee severance, proper environmental remediation and assistance in transforming the site to alternative uses.”