Filed at 7:28 a.m. ET

TOKYO (Reuters) - Toyota Motor Corp <7203.T>, the world’s biggest automaker, forecast a much bigger-than-expected $8.6 billion annual loss and said it would sell about 1 million fewer vehicles this year, leaving it desperately trying to cut costs in the grip of a severe market downturn.

The global crisis that has battered demand for cars and pushed U.S. rival Chrysler <CBS.UL> into bankruptcy has hit Toyota hard, reversing its rapid expansion into overcapacity almost overnight. Dozens of its factories stand half idle.

The Japanese giant posted its first-ever consolidated operating loss last year after a record profit the year before.

For January-March, Toyota booked a $6.9 billion loss, in line with consensus estimates, and cut its annual dividend nearly 30 percent — the first cut since at least 1994, when it changed its reporting period.

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