Toyota will cut its production capacity in Japan by more than 10 percent to some 3.1 million units by 2014, if The Nikkei [sub] is correctly informed.

Plans for this year still call for 3.4 million units made in Japan, up 23 percent from the previous disaster year. By reducing this number, it appears as if Toyota expects domestic demand to weaken. Toyota will not lay off workers as part of the production reorganization, and it wants to keep its supplier base well nourished, the Nikkei says.

Toyota has committed to a domestic output of 3 million units per year. As demand grows elsewhere, Toyota’s share of cars produced at home will get smaller. Like the other Japanese carmakers, Toyota suffers from an overvalued yen that makes exports uncompetitive.