UPDATE 1-Toyota 09/10 output seen -12% at 6.2 mln cars-media

* Toyota 09/10 domestic output seen 2.8 mln cars-media

* Shares fall 4.4 pct vs 4.2 pct drop in transport subindex

By Sachi Izumi

TOKYO, April 21 (Reuters) - Toyota Motor Corp (7203.T) will likely produce about 6.2 million vehicles globally in the business year to March 2010, a newspaper reported, down more than 12 percent amid a global sales slump and helping send its shares skidding over 4 percent.

Automakers around the world have been grappling with a sudden drop in demand since late last year, but the pain is especially pronounced at Toyota, which is saddled with too much capacity after years of building new plants to keep up with demand.

Toyota, the world's largest automaker, has been lowering output in the face of mounting inventories and had said production levels would hit bottom in January-March 2009.

But the Yomiuri newspaper said Toyota's daily production in Japan was unlikely to return to 12,000 vehicles, the minimum needed for a profit, until after October.

The paper said Toyota's domestic production for the current business year would be around 2.8 million vehicles, a fall of more than 30 percent since its peak two years ago and slipping below 3 million for the first time in 31 years.

"The reported (global) production plan seems to be largely in line with market expectations ... I think the output of 2.8 million units in Japan would exceed demand," said analyst Yoshihiko Tabei at Kazaka Securities.

"The stock market's focus now is not so much on how many cars Toyota plans to roll out but on how Toyota, as well as other carmakers, would rationalise production facilities by such measures as early depreciation and plant closures."

Carmakers' shares will likely remain top-heavy until the companies announce plans to book costs on their manufacturing facilities, he said.

A Toyota spokesman could not immediately confirm the Yomiuri report.

Toyota shares fell 4.4 percent to 3,700 yen, also pushed down by a stronger yen. The transport equipment subindex .ITEQP.T fell 4.2 percent.

The Yomiuri said the expected slide in production could make it hard for Toyota to keep its work force at current levels.

The Nikkei business daily reported this month Toyota's sales could tumbled to about 6.5 million vehicles in the current financial year, falling below 7 million for the first time in six years. [ID:nT20591]

The Nikkei also said Toyota's operating loss could balloon to over 500 billion yen ($5.10 billion) in the year to March 2010.

Toyota forecast it would make 3.4 million vehicles in Japan and 3.68 million overseas on a parent-only basis in the financial year that ended on March 31, which would be down 20 percent and 17 percent from the previous year, respectively. ($1=98.04 Yen) (Additional reporting by Yumiko Nishitani; Editing by Michael Watson)