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Hit by the standstill in auto sales, Toyota Motor Corp. (7203.TO) announced Wednesday that it plans to further suspend domestic output in April, while Mitsubishi Motors Corp. (7211.TO) said it will effectively cut its long-standing ties with Chrysler LLC.

The latest streamlining steps by the two Japanese car makers reflect the dark days ahead for the auto industry as demand continues shrinking. In January, industrywide sales dropped by over 20% in the U.S., Europe and Japan.

A Toyota spokesman said that the car maker will halt production at 11 of its 12 plants in Japan for three days in April, reducing total operating time during that month to 17 days.

However, he added that the world's biggest car maker expects its domestic output volume to increase in May from April as its inventory adjustment progresses and it prepares to launch new models.

Toyota's latest production cutback comes after its decision last week to offer job buyouts to all 25,000 of its North American workers and to cut the workweek by 10% at some U.S. factories in a bid to bring output levels down to meet sluggish sales.

In Japan, the auto maker is now in the middle of a plan to scale back output by 54% for the quarter through March from the same period a year earlier partly by suspending operations for 11 days in February and March.

The Toyota spokesman declined to provide the volume of the reduced production for April and said the company will decide on how many vehicles it will build in May at a later date, monitoring conditions in the auto market.

Also facing faltering sales and dwindling profits, Mitsubishi Motors said separately Wednesday it will discontinue its original equipment manufacturer contract with Chrysler in 2010, effectively ending a tie-up that stretches back more than 30 years.

A Mitsubishi spokesman said the car maker decided not to renew the contract under which Chrysler produces a pickup truck called Raider that has recently seen slack sales.

Once the current production deal finishes, it will mark an end to joint operations between the two car makers. Mitsubishi and Chrysler currently run a joint engine production venture in the U.S., but the engines are only provided to Chrysler.

The end of the alliance couldn't come at a worse time for Chrysler, which is seeking an additional $2 billion in federal funds on top of the $7 billion bailout it requested in December as part of a viability plan submitted to the U.S. Treasury Department on Tuesday.

The alliance between the two auto makers started in 1971 when Chrysler took a 15% stake in Mitsubishi. The U.S. company, which at one point had a 24% stake in Mitsubishi, dissolved their capital alliance in 1993 but they decided to continue their joint operations.

 
   -By Yoshio Takahashi, Dow Jones Newswires; 813-5255-2929; yoshio.takahashi@dowjones.com