Ford Australia reportedly has warned of job cuts after announcing plans to reduce production by 20% at its Broadmeadows plant in Victoria.

From 20 November, Ford will cut its daily production of new cars from 450 to 360 vehicles, according to The Australian newspaper.

"The action is simply about managing our production to meet market demand," Ford spokeswoman Sinead McAlary told the paper, adding: "Sales of large cars and sports utility vehicles have continued to drop off this year so we're simply taking the necessary business action of ensuring that we make the right number of vehicles to what we believe we can sell."

She reportedly confirmed the company was considering offering voluntary redundancies to its employees.

"It would all be voluntary but the size and the scope of that is still to be determined," she told The Australian.

Vehicle builders union chief Ian Jones told the paper the union did not object to voluntary redundancies.

"The industry itself is probably facing the toughest of circumstances it has ever faced," he said. "It's fast getting to a point where governments have a significant role to play in ensuring their local manufacturing industry."

Ford Australia makes a range of six and eight-cylinder cars and the Territory crossover spin-off. Smaller models are imported.

High petrol prices have recently prompted Australians to buy smaller cars but this trend showed signs of tailing off, according to last month's sales statistics.