Toyota Motor said Friday it was abandoning a plant in California that it jointly owned with ailing US giant General Motors -- the first time the Japanese firm has ever pulled the plug on a factory.

The move, which affects 4,700 workers, follows GM's decision in June to drop its ownership stake in the joint venture, New United Motor Manufacturing Inc. (NUMMI), as it restructured under bankruptcy protection.

Toyota, the world's largest automaker, has never shut an assembly plant anywhere in the world before and the decision to pull out of California marks a dramatic turnaround for the group after years of rapid expansion.

"We have determined that over the mid- to long-term, it just would not be economically viable to continue the production," said Toyota's North America head, Atsushi Niimi. "We deeply regret having to take this action."

The plant in Fremont, California will end production for Toyota in March and shift output of Tacoma pick-ups to a factory in Texas, while Corollas will be manufactured in Canada and Japan for the North American market.

"Toyota's announcement that it will close the NUMMI plant is devastating news for thousands of workers in California," said Ron Gettelfinger, president of the United Auto Workers union.

"It's unfortunate the company chose to close a US facility after benefiting so greatly from the federal 'cash-for-clunkers' programme, which is funded by US taxpayers," he said in a statement.

Toyota, which overtook US rival GM in 2008 as the world's largest automaker, is struggling to cut costs after falling into the red for the first time, with a 436.9 billion yen (4.7 billion dollar) loss in the year to March.

The Nikkei business daily reported on Wednesday that Toyota plans to cut its global production capacity by one million vehicles, or 10 percent.

Toyota actively expanded its global production facilities in recent years to meet brisk demand, particularly for its fuel-efficient cars, leaving it vulnerable to the current collapse in worldwide sales.

The Japanese company has idled plants and slashed thousands of temporary jobs in response to its biggest ever crisis.

"With the closure (of the California plant), Toyota is now seeing light at the end of the tunnel for its operational cuts," said Yasuaki Iwamoto, an auto analyst at Okasan Securities in Tokyo.

"The closure may not have a big impact on Toyota's profit," he added.

New United Motors Manufacturing Inc. is the only unionised Toyota plant in the United States, but Niimi said the presence of United Auto Workers had no "direct impact" on its decision.

"California is a very high cost location, mainly because our major supply bases are located in the Midwest region of the US," he said. "Also California's cost of living is rather high."

Toyota entered the joint venture in 1984 as an experiment to see if American workers could build cars according to their standards.

Since then, it has pursued a policy of building the majority of the vehicles it sells in the United States in North America and has launched several advertising campaigns highlighting its contributions to the US economy.

"We remain strongly committed to maintaining a substantial production presence in the USA and North America," said Niimi. "To that end, we will consider moving additional Corolla production back to North America over time."