Toyota will produce less cars in Japan this year than last year. This will be the third consecutive year that it has failed to grow sales in its domestic market.

The Japanese newspaper Nikkei reported that Toyota's president, Katsuaki Watanabe, expects sales to fall to 1.65m vehicles this year, down from an initial target of 1.72m units.

Nevertheless global sales are expected to reach 8.4m units, thanks to strong demand in the Middle East and a pick-up in south east Asian markets.

Last month Watanabe told reporters that Toyota is considering building a new assembly plant in Japan - its first for nearly 20 years. Unconfirmed reports said that the plant would be in the north of the country and would help Toyota meet global demand for luxury models and hybrids.