Profits have dropped 73% at the Czech-based joint venture between Toyota and PSA Peugeot Citroen because of falling demand for the small city cars built there.

TPCA posted a net profit of US$20.1m for last year as revenue fell 23% year on year and it has agreed with unions to freeze wages for this year. It is also currently working on transferring some of its core workers to Peugeot’s Slovakia-based unit.

The company’s output of Toyota Aygo, Peugeot 101 and Citroen C1 three- and five-door small cars totalled 270,705 units in 2011, down 9% from 295,712.

Earlier this year, TPCA said it would cut its working week to four from six days and daily shifts to two from three, starting in May, to combat the slacking demand for its models, and reduce the overall output by about 20% to 221,000 cars.